What is a Genuine Opportunity to Dispute a Tax Liability?

Taxpayers are able to dispute a tax liability before the IRS can take certain collection actions. But what if the IRS does not afford the taxpayer with a genuine opportunity to dispute the liability as required by law? The court addresses this in Dood v. Commissioner, T.C. Memo. 2019-107. Facts & Procedural History The taxpayer…

IRS Tax Debts from Retirement Account Distributions

Retirement account distributions typically trigger sizable tax liabilities. These liabilities often go unpaid, which results in unpaid tax debts and IRS collection enforcement actions. With careful planning, sometimes these taxes can be avoided. Tax on Retirement Account Distributions Most distributions from retirement accounts trigger income taxes. This includes distributions from IRAs and 401(k)s. The idea…

Can the IRS Take My 401(k) Plan Account?

Can the IRS take my 401(k) plan account for unpaid taxes? Does it have to wait until I take distributions from the 401(k) plan account? The IRS recently asked its tax attorneys this question in CCA 201927019. About 401(k) Plan Accounts The 401(k) plan account is the most popular method for saving for retirement. They…

Getting the IRS to Pay Your Attorney’s Fees

The IRS is required to pay a taxpayers attorney’s fees for defending unsupportable positions. This can even include attorney’s fees when the matter is settled administratively before court. But the IRS is not required to pay attorney’s fees if the IRS’s position is substantially justified. The Bontranger v. Commissioner, T.C. Memo. 2019-45, helps clarify how…

Using Probate to Extend IRS Collection Period

When a loved one dies, the person who serves as the personal representative is tasked with wrapping up the decedent’s affairs and paying known creditors.  But what if one of the creditors is the IRS?  Can the probate process extinguish unpaid IRS taxes?  The recent United States v. Chicorel, No. 17-2321 (6th Cir. 2018) provides an…

IRS Can Collect from Property Purchased in Corporation

Can a taxpayer put property beyond the IRS’s reach by purchasing the property in the name of a corporation or a third party?  The answer is typically “no.”  The recent Arlin Geophysical Co. v. United States, No. 2:08-cv-00414-DN-EJF (C.D. Utah 2018) provides an example. Facts & Procedural History The court case involves an individual who…

Family Member’s Mortgage Filing Trumps IRS Lien?

If a child owes unpaid taxes to the IRS, can the parent file a lien against the child’s property to prevent the IRS from levying on the property?  The court considered this in United States v. Allahyari, No. C17-668 TSZ (W.D. Wash. 2018). The Facts & Procedural History Upon graduating from law school in the early…

Agreeing to an IRS Real Estate Foreclosure Sale

Can you ask the IRS to take real estate to satisfy your unpaid tax liability?  The answer is “yes,” but it is usually not the best option.  The recent order in United States v. Leroy, No. 2:18-cv-01777-MCE-DB (E.D. Cali. 2018) provides an example of this. The Facts & Procedural History Ms. Leroy owed $177,653.70 in unpaid…