I am expecting a lump sum settlement from workers compensation. I owe the IRS and the state monies. Can the attach or freeze my settlement?

The State has been know to put liens on worker's compensation benefits, but each state has it's own procedures, so without your location, it's hard to say. The IRS usually puts liens on property, such as your home, vehicle, etc. haven't heard of them docking comp benefits, but it's not outside of their abilities. The IRS can take what they want, when they want without reason or warning. They are one of the most powerful organizations in the US. Even though there is no real written law that you must pay income tax, they can still consider money you haven't paid them because you don't owe it to them, as a debt. America, home of the false freedom. This country grants us privileges, not rights.

If the IRS is made aware of the pending settlement, you can bet the mortgage payment that they WILL attach the wrokmen's compensation benefit.

The state tax agency will know about the award, since state agencies communicate such matters as a matter of routine, and most state agencies will notify the IRS as well as a matter of routine.