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QUESTION:

56 yr old married female on ss disability, husband works construction. We owe the irs 110,000 and the state of Indiana 52,000. We are making a small payment to the state but the federal is in non collectable status for now.  Every year they have us fill out our current finances.  Now can they garnish my ss and or my husband’s retirement, annuity or life insurance at his retirement.
The IRS Blues



ASK YOUR MONEY'S ROSEMARIE BOYD ANSWERS:

Dear IRS Blues:

Unfortunately, the IRS always reserves the right to collect back taxes.  This includes garnishing income.  In general, however, unless your financial situation changes, you should be alright.  I would encourage you to seek the advice of a tax attorney who will be able to negotiate with the IRS on your behalf.  As the old saying goes, “The devil is in the details”.  There are many nuances which can dramatically change the situation.  Remember also, even though you are in a non-collectible status, you are still accruing penalties and interest.  Another consideration is that each missed tax payment has a statute of limitations associated with it.  It may be that some of your back taxes have reached that point.  When that happens, that particular tax liability disappears.  Only a competent tax attorney will be familiar with all of these details.

Thanks for your question,

Rosemarie A. Boyd, CFP

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