Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I have an IRS tax lien and making installment payments. I am…

Customer Question
I have an IRS...

I have an IRS tax lien and making installment payments. I am likely to win a lawsuit within the next year. Can IRS attach my settlement?

Accountant's Assistant: The Expert will know how to help. Please tell me more, so we can help you best.

I have been paying on past taxes now for over 10 years. IRS placed a large tax lien on me at that time. I still have a 55K balance and am on an installment plan. I am likely to settle on a personal lawsuit for significant $$ within the next year.

Accountant's Assistant: Is there anything else the Expert should be aware of?

Not that I can think of. How can I protect receiving my settlement from my suit?

Submitted: 5 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 16 minutes by:
8/30/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 5 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,481
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi. My name's Lane. - I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice on three continents since 1986.

...

If you are current on the installment agreement, and stay that way, they will likely not arbitrarily attach the settlement by levying a bank or other account. The lien will stay in place so that if you try to sell any assets they will be in line first, to protect their interest.

...

Also, unless the settlement is for physical injury, sickness or wrongful death (or parasitic damages arising FROM that) there will be a 1099 and you'll need to pay the taxes FROM that settlement.

...

Now, what you need to worry about is whether you have what's called a partial pay installment agreement. The IRS is permitted by law to enter into installment agreements that will never pay them back. It’s okay ifyours will not – the IRS has 10 years to collect from you, and after the 10 years expires, you will not owe them, and the remaining balance will be forgiven.

...

But in your situation that may not be a good thing. Internal Revenue Code 6159(d) requires the IRS to review Partial Pay Installment Agreements once every two years. and if your financial condition has improved, they can raise the expected payments, and MIGHT levy (actually attach, grab, assets)

...

But if your installment agreement is one where they SILL be paid back within 10 years, and you stay current, and pay all taxes due going forward, you'll likely not hear from them

Ask Your Own Tax Question
Customer reply replied 5 months ago
They told me that Feb 2019 is last month on statute. Been ongoing since 1998. Currently 55k balace and agreement $200 / month. They addeded 10 years for some reason. Current payments are for 2003 and still have 2004 on the books. Settlement is taxed???
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 5 months ago

Yes, settlements are taxed, again, UNLESS, or personal injury or sickness .. something physical.

...

The tax policy/logic works like this; physical injury/sickness/death is tax free, but attorneys fees not deductible.

...

Settlements for lost income, wages, employment discrimination, business protection or losses, taxes, punitive damages, (pretty much everything else) is taxable, but attorneys fees are deductible.

...

What's the settlement for?

Ask Your Own Tax Question
Customer reply replied 5 months ago
VW suit on 2 diesal cars. 1st offer over 40k. Declined and will move to trial if necessary
Customer reply replied 5 months ago
Atty thinks we may get close to 70k
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 5 months ago

Yep, it's taxable. you'll get a 1099.

...

See this:

...

https://www.irs.gov/pub/irs-pdf/p4345.pdf

Ask Your Own Tax Question
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,481
13,481 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,312 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,362 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

14,120 satisfied customers

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

Megan C

Megan C

Certified Public Accountant (CPA)

8,652 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Our club which is incorporated and non-profit received a
Our club which is incorporated and non-profit received a 1099-MISC for grant money we received. I am not sure what to do with it. … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
735 satisfied customers
I have a question regarding IRS installment agreements. I am
I have a question regarding IRS installment agreements. I am a self-employed sole prop that is running a company that has grown quickly the past few years. I am paying on an IA from 2014-15 (balance a… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,311 satisfied customers
I think I may be getting a Notice of Tax Lien from the IRS
I think I may be getting a Notice of Tax Lien from the IRS for back personal income taxes. Before issuing this, will the IRS send a certified or registered letter demanding payment, or could the actua… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,362 satisfied customers
I have an existing installment agreement. I need to change
I have an existing installment agreement. I need to change the checking account from which it is drawn. I was told by the IRS that I would need to complete a 433 and submit it. I cannot find an email … read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Trying to determine the tax status of a non profit group. We
trying to determine the tax status of a non profit group … read more
Lane
Lane
JD, CFP, MBA, CRPS
13,481 satisfied customers
As per the new tax law, the property tax deductions of 10000
As per the new tax law, the property tax deductions of 10000 is it per property or per tax payer per property?If both wife and husband file together can they claim 20000 towards one property or just 1… read more
Lane
Lane
JD, CFP, MBA, CRPS
13,481 satisfied customers
Are religious (church) non-profits required to file state
Are religious (church) non-profits required to file state and federal taxes annually? … read more
Lane
Lane
JD, CFP, MBA, CRPS
13,481 satisfied customers
Interested in information about new tax laws and their
Interested in information about new tax laws and their effect on S Corporations … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
If I owe taxes and i have an installment agreement and I get
if I owe taxes and i have an installment agreement and I get married can that affect my new husband … read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,362 satisfied customers
I have an installment agreement with IRS for monthly
I have an installment agreement with IRS for monthly payments. I paid 8 days late on this months payment. Can they cansel the agreement??… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,362 satisfied customers
I am considering filing as an Non-Profit for the tax
i am considering filing as an Non-Profit for the tax advantage but do not know that it would work for me. I am just using this as a tax shelter as I will be owing lots more money in taxes as a single … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
14,120 satisfied customers
Do you know non profit tax law? California. The 501(c) 3 has
Do you know non profit tax law? JA: Can you tell me where the nonprofit is registered? Customer: California JA: Has anything been officially filed? If so, what? Customer: The 501(c) 3 has existed sinc… read more
Lane
Lane
JD, CFP, MBA, CRPS
13,481 satisfied customers
I have an established installment agreement but have lost my
i have an established installment agreement but have lost my job...how do i cancel the agreement or get it on "hold" until im working again? thank you, albert … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,283 satisfied customers
Is the interest one pays on a personal loan a tax deduction?
Is the interest one pays on a personal loan a tax deduction? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,051 satisfied customers
I have a installment agreement to pay FICA taxes that I
I have a installment agreement to pay FICA taxes that I could not pay in past years from employee with holdings. Can I deduct the tax portion paid on the installment agreement, since it wasn't deducte… read more
abci168
abci168
Principal
27 satisfied customers
Do you have knowledge on tax laws regarding non profit
Do you have knowledge on tax laws regarding non profit donations and so forth? … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,311 satisfied customers
Tax question: I have an installment agreement with the IRS
Tax question: I have an installment agreement with the IRS for past tax years (2014-15) and have been paying $500 a month on about $27,000, For this past tax year (2016) I paid my tax bill in full wit… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
14,120 satisfied customers
I have an installment agreement question, I owe less than
I owe less than 1000 from previous years taxes federal..now we owe more for this year...I can pay off the old one first..but can I still do an installment agreement without a filed tax lien on the new one..and if so what are the dollar values..10k or 25k balances owed? … read more
Lane
Lane
JD, CFP, MBA, CRPS
13,481 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x