[mrlarry]

Recently I am receiving tax bills from the IRS... I am on SSD and that is my only income... What can the IRS do to me?

[AtlantaTaxExpert]

If SSD is your ONLY income and you have no other substantial assets, the IRS can do virtually nothing to you.

I have a client in a similar situation. She is retired and earns a small income working part-time. She owes somewhere between $25-$35K to the IRS due to back taxes she failed to pay while working as a real estate agent. She also owes the state about $4,000.

She lives with her sister, drives a 10-year old car, and lives paycheck-to-paycheck (and from monthly SS check-to-SS check). I sent a letter to both the IRS and the state where she lives explaining these facts of life. By law, neither the IRS or the state can touch her Social Security benefits if those benefits are needed to maintain a minimal living standard. I made it clear that if they tried to garnish her wages at her job, she would QUIT!

Now, she does file tax returns each year, and her refunds, however small, are confiscated toward her tax debt, but, other than that, neither tax agency bothers her except for the occasional letter. Now I did explain that if she ever has some type of windfall, like a lottery win, both the state and the IRS will be waiting for their "pound of flesh".

Other than that, she is home free.

Your situation seems to be similar. If you own a home, the IRS will put a lien on it, but that cannot be collected until the house is sold.