The IRS generally cannot reach funds in a spendthrift trust to satisfy the trust beneficiary’s unpaid tax debts. But can the IRS factor in trust distributions in calculating the how much the taxpayer can pay under an installment agreement? The recent Melasky v. Commissioner, 151 TC 9 (2018), suggests that the IRS can do this…Continue readingIRS Installment Agreement Calculation Counts Spendthrift Trust Distributions
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…Continue readingIRS Can Collect from Property Purchased in Corporation
Taxpayers often ask us whether they can transfer property to another person if they have an unpaid tax debt or they expect to have a tax debt they cannot pay. There are a number of rules that have to be considered in answering this question. The answer varies based on whether the IRS has a…Continue readingCan I Transfer Assets to Another Person If I Owe the IRS?
1. Penalties continue to accrue Unpaid tax debts are subject to late payment penalties. The penalty is typically half of one percent of the amount of the unpaid tax. This may not sound significant given the low rate, but it adds up. The penalty is computed each month or part of a month after the…Continue reading5 Reasons Why You Should Resolve Your IRS Debt Today