Posted on 04/22/2018 12:37:24 PM PDT by lee martell
Remember that song by Tom Jones; "I who have nothing!". That pretty much describes me. I'm near 62 y/o, working part time. I hope to keep working at least for the next eight to ten years, then start taking my Social Security.
I have no savings to speak of. I will always owe the IRS something from unpaid student loans or wrongly filed tax statements. Most times I don't receive any return at all, it's simply 'absorbed' and paid out to the Govt. The one bright spot is that due to a sibling's death last year, I have received about $20.000 from her estate. More should be coming later this year.
My question is, is there anyway to protect that inherited sum of money, to safeguard it, in case the govt. gets tired of waiting for the scheduled payout. I know from experience that the IRS has the ability to go to my bank at any time, and scoop out all that it contains, if they choose to do so. It has happened before, and I've never forgotten the shock.
Some online searches to that question advise setting up a retirement plan. I currently don't have one. Are there short term retirement plans that would allow me excess to my principal without incurring an Early Withdrawal 'punishment' fee? Could I renew such a plan after a few years have passed?
If it matters, I'm a Navy veteran. My next stop would be to ask someone at the Navy hospital to refer me to an advisor. Most people think they know, but have limited knowledge. I want to do things above board, no tricks. But I don't like the notion of being fully vulnerable to the mercies of the tax collection system.
Consult a CPA or attorney who does tax controversy work, and see if you can make an offer in compromise or at least set up a payment plan. Unless your tax liability is about to abate due to age (generally the IRS has 3 years to assess, and 10 to collect after assessment) you need to communicate with the IRS and most likely pay them something. If you don’t do so voluntarily, the IRS will take payment from you. They will know you are receiving an inheritance, because the executor your sister’s probate estate will have to file a tax return for the estate.
They are forgiven but debt relief is taxable. New law makes student debt forgiven on death is not taxable.
Your best asset to invest in is your house. The IRS will generally leave home alone from collection. Update your bathroom and or kitchen, replace old furnace or windows to lower utility costs, take care of deferred maintenance items.
In most states I agree; however, watch out for blue states, they love OPM!
I doubt that. Since their job has nothing to do with investments but with the expertise to present clients before the IRS.
Go talk to an accountant.
I think you are our of luck. Before she died your sister could have set it up to go into a trust and pay you a little each month. At this point it’s yours and the IRS is likely entitled to take it.
CASH CASH CASH always deal in COLD HARD CASH!!!
Get a treasure box, fill it with cash and hide a few instructions on how to find it in your documents that get released to your next of kin when you bite it...
That method has a better chance of passing stuff on than anything that has to pass by the greedy hands of the federal tyranny...errr government.
(c) Exceptions
(1) False return
In the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time.
(2) Willful attempt to evade tax
In case of a willful attempt in any manner to defeat or evade tax imposed by this title (other than tax imposed by subtitle A or B), the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time.
(3) No return
In the case of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time.
“To be more accurate, ten years from date tax was assessed.”
Correct. Generally the IRS has three years to do assessments thus the window of action could be 13 years.
Those are extensions of time to assess a tax. The ten years is from the date tax is assessed.
“I take it you’ve never been screwed over by the IRS, have you.”
What the poster is describing is not being “screwed”. It is owing on bills he refuses to pay. Big difference. Nothing conservative about refusing to pay debts owed.
“Those are extensions of time to assess a tax. The ten years is from the date tax is assessed.”
Correct. Bottom line is that there is NO 10 year statute of limitations on taxes. There is a ten year window for collections after the tax has been assessed. The statute of limitations for assessment is three years with exceptions.
“That method has a better chance of passing stuff on than anything that has to pass by the greedy hands of the federal tyranny...errr government.”
STUPID STATEMENT
I was executor for my mother’s estate. It was distributed without interference by the ‘greedy hands of the federal tyranny’.
Not only that but it was paying hefty dividends and contained capitol gains which were stepped up in basis at her death.
If it would have been in cold hard cash in a box it would have been only a fraction of what it was.
Create a trust. Trusts are a powerful legal tool, unique to our laws.
PFL.
The estate is taxed, not the heirs.
If you have a repayment agreement with the IRS, it’s a contract. As long as you are making the agreed payments, the probably can’t take it without going to court first.
You could also set up a new checking account at another bank and deposit the money there. The irs has more important things to do than checking your finances on a regular basis.
Keep up to date with the payment plan and don’t worry.
If you owe the IRS money anything you inherit is fair game....if they find out. If you can keep them from finding out put it in gold or something similar in a safe hidden at your house!! Best plan is to get a lawyer to reach a settlement with them. I have heard of people settling for pennies on the dollar!!!
I’ll take your suggestion for the time being. Just deposit most of it into another bank. This will do for right now.
At least I won’t have all my eggs in one single basket.
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