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    workingwife's Avatar
    workingwife Posts: 1, Reputation: 1
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    #1

    Jan 20, 2009, 10:40 PM
    Tax debt and social security lump sum payments
    My husband and I owe roughly 14,000.00 in back taxes. He became totally disabled in 2005,up to that date and to the present I have been under an agreement with the IRS that I was unable to make monthly payments due to economic hardship,but was in agreement that they would keep any income tax I was due. In December he was finally accepted on social security after 3 years of going through the process. My question is,he is owed a substantial amount in back ss benefits,which although its quite a bit,its nothing extra. We owe doctors,our disability consultant,utility bills,past due rent etc;things that we have been scraping by to pay with only my income,and would be able to catch up on with the back ss payments. But I am afraid the IRS will keep the entire amount to pay the tax debt even though I currently have an agreement with them. I am willing and now,able to make monthly payments in addition to them keeping my income tax checks to pay the debt,and wouldn't be objected to them taking a percentage of the lump sum payment,just not ALL of it. CAN the IRS take the entire amount? Or just the 15% I keep hearing. I should also say I've been told its 50%,and also the entire check. HELP!!


    :eek::confused::(
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jan 21, 2009, 10:56 AM
    You need to contact the Tax Advocate in the IRS to get hep to determine your rights in this matter.

    If the IRS Tax Advocate cannot help you, then you probably should hire an enrolled agent to review your case to determine how much, if any, of the back SS payment check the IRS can legally take.

    Your case is simply too complicated to properly address on a forum of this type. You need a face-to-face interview to cover all the variables.

    Sorry!
    penrose1333's Avatar
    penrose1333 Posts: 3, Reputation: 1
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    #3

    Jan 26, 2009, 11:38 PM
    Hi, we were in the same situation, I am currently on SSDI. My husband was injured severely in 2006. We owe 42,000 in back taxes He went through 2 years of the disability process. He was awarded disability in 2007. He got the lum sum for 22,000. We still owe the taxes, They did not keep anything. Thank God. We were in extreme dept. Hope it works out for you.
    Lodi4me's Avatar
    Lodi4me Posts: 3, Reputation: 1
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    #4

    Jul 18, 2010, 10:46 AM

    Do we have a tax liability on lump sum payment for SSD?
    Lodi4me's Avatar
    Lodi4me Posts: 3, Reputation: 1
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    #5

    Jul 18, 2010, 10:50 AM

    We do not owe any back taxes but are concerned about tax liability on the past disability lump sum payment. Will we be taxed on the lump sum payment?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Jul 19, 2010, 02:23 PM
    Maybe; it depends on how much the lump sum payment is and what other income you have.
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