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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7851
Experience:  15years with H & R Block. Divisional leader, Instructor
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I owe a significant amount of back taxes. I have tax attorney

Resolved Question:

I owe a significant amount of back taxes. I have tax attorney handling an am about to fill out form 433a &B. I received a large life insurance check from spouses death 7 months ago. I've used proceeds to live on while I took time off. I also bought an RV to travel.
I'm in process of working out a payment plan.
Question.....can IRS seize RV and cash left from life insurance proceeds?
Submitted: 2 years ago.
Category: Tax
Expert:  Robin D. replied 2 years ago.

Robin D :

Hello and thank you for using Just Answer,
Please accept my condolences on the loss of your spouse and then having to deal with IRS issues.
Unfortunately, the IRS can seize assets and levy bank accounts if a taxpayer owes taxes.
They will not take these actions though if you file the Offer in Compromise before they do levy your account.


While your offer is being evaluated:



  • Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);

  • A Notice of Federal Tax Lien may be filed;

  • Other collection activities are suspended;

  • The legal assessment and collection period is extended;

  • Make all required payments associated with your offer;

  • You are not required to make payments on an existing installment agreement; and

  • Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.
    It would be to your best advantage to get the offer submitted as soon as possible.

Robin D :

The IRS will generally approve an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone. Before they can consider your offer, you must be current with all filing and payment requirements. It is good that you are attempting a payment plan because if the IRS ses that you can pay over time they will not levy accounts as long as you are current with the payments.

Robin D :

They also do not like to seize property but will if they cannot get a response from the taxpayer and the taxpayer does not setup and stick to a payment plan. Levies and seizures are a last resort and although they will place liens on property, that is just to protest the governments interest.

Robin D :

protest* sorry protect

Robin D :

Hi, let me know if you need more info.

Robin D :

Can you see the entire answer?

Robin D :
<strongCustomerhas entered this chat! Are you still with me here?
Customer: yes.......when I fill out form 433 do I list all checks written by me for living expenses and purchases from life insurance proceeds?
Robin D :

No, you will need to list all your accounts but not the checks you wrote.

Customer: But...I was told on the 433A&B forms they will want copies of all checks written for the past 6 months.
Robin D :

They will want to see the checks because they would want to know where the money went. They want the statements from the last 6 months

Robin D :

Are you not going to let the tax attorney handle this for you?

Customer: Yes i am.....it's Sunday morning so I thought I'd go online and ask.
Robin D :

Well it is always good to know what is involved. The 433 is to show your accounts and assets as well as to calculate your expenses

Customer: I gave my children money....can the IRS ask for the money back?
Robin D :

The IRS uses this to see how much you can pay and if your offer is reasonable based on your assets and expenses

Robin D :

No they usually would not ask for the money back unless they can show that it was an attempt to hide it from the government

Customer: thnks.....will the IRS seize assets or make mell sell them?
Robin D :

They look at the asets to see IF you sold them could you pay your debt. This allows them to see iff your offer is reasonable. It does not mean they require you to sell them

Robin D :

Did you have more info to ask about

Customer: From the cash proceeds from the life insurance ......cash was put into trust for my son. This was in my wife's will.
Robin D :

If the trust if for your son and his then the IRS would not count that for you

Customer: Thanks He trust says I can use it for funds that are for my son
Robin D :

Just make sure you divulge every asset to your attorney so they are never surprised by the iRS and you should be OK

Robin D :

You would need to be the beneficiary of the trust for it to count

Customer: Does the IRS verify every check written over the past six months?
Robin D :

They certainly want to see if after the debt collection started did the taxpayer start moving money out of accounts in an attempt to hide it, so if that is what you mean by verify then yes

Customer: I understand.....what I'm asking is if they not think I'm hiding assets....and I'm not....will they still look at every check? Kinda like an audit
Robin D :

Yes, it is very much like an audit. They would verify if amounts were actually received by the persons that are on the checks.

Robin D :

I was not implying you were hiding but just wanted to let you know that is one thing they would always look for

Robin D :

\

Customer: Thank you....you've been very helpful!
Robin D :

The process is not as scary as it seems. You did well to retain professional help.

Customer: We are offering a payment plan over several years....I m being selfish because the RV has brought my 10 year old son and me so much pleasure since mom passed away. I understand the IRS could care less! I'm just hoping they will let me keep my house, car, etc. I do make a very good income and have the income to pay over an extended period.
Robin D :

As long as you are in a pyment plan they will not seize assets or levy your accounts. I hope you and your son can continue with happy times now.
Rating the assistance is a very important part of Just Answer. Just Answer uses positive ratings and the follow up survey to ensure that experts are available for assisting and answering questions.

Customer: One last question.......I'm turning in forms 433A & B on December 28th along with our suggested payment plan. How long oes IRS usually take to make determination?
Robin D :

92 percent of offers processed by our Centralized Offer in Compromise sites are currently closed within six months or less.

Robin D :

The above is directly from the IRS on processing times

Robin D :

While they process they suspend collections

Customer: So it I'll take hat long?
Robin D :

It could or less

Customer: My tax attorney thought this would have to go to a District Director for a decision because of the amount owed.
Customer: Are you familiar with this?
Robin D :

That very well could be. The key to a successful Offer in Compromise is making sure that the IRS can process your application, and that you submit complete backup documentation to support your offer.

Customer: We will have all appropriate financial data for them.
Robin D :

It is the taxpayer that does not complete the paperwork properly that has the problems, that is why I said you did well to get the professional help.

Customer: Btw.....this process has been ongoing for several years! A good bit of interest has piled up...hoping to get an abatement of interest for years wife was hospitalized. Have you seen this?
Robin D :

Penalties can be abated but interest is not generally under abatement unless the IRS gave written advice that was bad.

Robin D :

The facts surrounding your spouse would be reason for abatement of penalties.

Customer: That's What i meant...penalties. So ......once I turn in the Foms and offer on Dec 28th it could take several months before I hear from them?
Robin D :

It may be less, it all depends on how quickly they can verify the info. You must continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.

Customer: you have been terrific!!! Thank you so much! I did not sleep well oat nite worrying about this. I feel much better now.
Robin D :

Good, then you early morning CHAT was worth it.

Robin D :


  • Rating the assistance is a very important part of Just Answer. Just Answer uses positive ratings and the follow up survey to ensure that experts are available for assisting and answering questions.



Robin D :

Your rating of the assistance releases me.

Robin D :

Were you presented with the rating options? They go from (I think) Bad to Excellent

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7851
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 2 other Tax Specialists are ready to help you

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Robin D.
Robin D.
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15years with H & R Block. Divisional leader, Instructor