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jrgm13 · Aug 15, 2006, 10:32 AM

I owe over $11000 in back federal tax for 1996. Can the IRS put a lien on the home we live in when the house is in my wife's name and only I owe the back tax? I am paying $5 a month on this bill but have signed no payment agreement with the IRS. Will the 10 year statute of limitation on federal tax collection cancel this debt on June 1, 2007. My only income is social security disability of $1025 per month. My wife and I file taxes seperatly. Thanks for any info.

AtlantaTaxExpert · Aug 15, 2006, 04:23 PM

If the house is in your wife's name only and she is in no way connected to the taxes owed, then the IRS cannot touch the house and, in most cases, cannot touch your Social Security disability.

In my opinion, you are home free unless you go out and win a lottery.

jrgm13 · Aug 21, 2006, 08:53 AM

They changed the law about seizing social security benefits to pay back federal tax. They can take 15%. The IRS has hired private collection agencies and they are going to start on people owing $25000 or less nearing the end of the statute of limitation for federal tax collection (me). Looking at checkbook records I see that I've made over 50 payments to the IRS amounting to at least $630. For the past few years the IRS sends me a letter for each of the years that I owe (96,97&98) telling me how much added interest and penalty but they have not figured in any payments that I made over the years. What do I do? The state forgave my state tax because I can not work anymore. This all comes from a legal problem I had in 1996 and the only money I had was in a 401K fund ($34000). They were going to withhold about 30% for taxes and penalties if I wanted to withdraw any funds. The lawyer knew how to work me and had me transfer my money to the janius fund because he said I could withdraw money without withholding. The lawyer ended up with my money then dropped me. I ended up on social security disability. Now they changed the ss seizure law and I'm scarred. How do I get the IRS to figure in payments made? Thanks for any input.

AtlantaTaxExpert · Aug 21, 2006, 05:26 PM

I am aware of the law change. However, if the Social Security is your only source of income and you can show that you alone have no assets or other income sources, then it is likely you can show that 15% the IRS wants to take will cause you undue hardship.

If you thoroughly read the procedures that the IRS sends you with the collection or lien notices, they will tell you which form you have to fill out to show your net worth and income sources. I fill one out for a client of mine about once every three years who owes about $22,000 to the IRS and about $4,000 to Georgia, is retired on a small Social Security pension, lives with her sister, has a job which pays aboput $20K a year, and she still has not had her wages or her Social Security garnished.

You may want to take your case to a local tax professional, perhaps an enrolled agent, to have him/her go over all your options.

jrgm13 · Jun 18, 2007, 09:34 AM

I owe about $16000 in federal taxes now and am still paying $5 a month for each year, 1996 (about $12000) 1997 (about $3800) and about $800 for 1998. My mom and sister told me that they will give me $5000 total for an offer to the IRS to satisfy all my federal debt for this amount. I am wondering if I call the IRS with this offer, will this open a can of worms. The IRS isn't contacting me in anyway other then the annual letter stating what I owe for each year. They just keep cashing those $5 checks but I would like to settle and I don't know how much longer my 81 year old mother will live. What do you think I should do? Call with the offer or let things go as they have for the past 11 years?

AtlantaTaxExpert · Jun 18, 2007, 10:58 AM

The Offer in Compromise process has become a rather expensive exercise that requires a tax professional to properly prepare. Enrolled agents do NOT work for free, so you could expect to spend about $1,000 in tax pro fees, all to prepare an offer that has only a 50-50 chance (at best) of being accepted. However, since you must send in the $5,000 with the offer, they would take the money and apply it to the debt. NOT a smart option, in my opinion.

In my opinion, you should just leave well enough alone. The IRS has probably written off your tax debt as uncollectible and gone on to greener pastures.