A few months ago, I received an IRS letter indicating that I owe back-taxes from the year 2007. I called them, they sent me the transcripts. It didn't take me too long to identify the error on those papers.
It was Fidelity Investments that reported IRS 80K+ income for the year 2007. I used to have a 401K retirement account with Fidelity Inv. back in early 2000s but I had withdrawn all my savings in 2003 when I changed jobs, the amount was about 10K and I paid taxed on it. The account was closed.
After lengthly phone calls and emails, I finally wrote a letter to the retirement department of Fidelity Inv. and asked them to correct this mistake.
Anyway, this is where the story actually begins.
In the reply letter, Fidelity Inv claimed that I had an unpaid margin debt on my brokerage account in 2007 , in excess of 80K and they obtained a court order to collect this debt back in 2007 as well as reporting it to IRS as income.
I have never traded stocks with Fidelity Investments before and I had never been informed and contacted by Fidelity Investments regarding this debt situation. The only business I had with Fidelity Inv. was my 401K account which was closed in 2003.
After obtaining and reviewing court records, I found out that Fidelity Inv. provided an incorrect address to the court system , so that court papers were not sent to me.
It is extremely difficult for me to believe that this was an innocent error because Fidelity Inv. had my address and communicated with me for years when I had 401K account with them.
Anyway, being unaware of the situation, it looks like Fidelity Inv ran its own show in the court and obtained a collection judgment against me and reported this to IRS. Thankfully IRS contacted me.
I am not sure what type of case is this? Business fraud? Obstruction of justice by mail fraud ? I want also collect legal fees and expenses from them when this is over. Please advise the best and quick solution to this case.
Thanks in Advance.
1 Answer from Attorneys
You must file an order to show cause to vacate the judgment in the court where the judgment was entered. If you were served at an address that you did not live at, you will most likely be able to vacate the judgment on the grounds of lack of jurisdiction. Once the judgment is vacated, you will be able to defend the action. Please contact my office directly if you would like to discuss your case in more detail.
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