There are a number of difficult questions that come up when one spouse has a debt with the IRS and also owns property jointly with their spouse. The question is often whether the spouses can transfer the property to the non-liable spouse. The answer is, maybe. The court recently addressed this in U.S. v. Gerard,…
Category: IRS Debts
IRS Debts
Tax debts owed to the IRS, including unpaid taxes, penalties, and interest. Give us a call to see how we can help, (713) 909-4906.
IRS Cannot Use Court to Collect from Third Party Located in Another State
The IRS has a number of collection tools at its disposal. This includes the ability to take the taxpayer’s property without court intervention. This power doesn’t extend to all property. For example, the IRS has to go through the courts to get at property held by third parties. As the court reminded the IRS in…
Texas Homestead Exemption Helps the IRS Collect Tax Debts
Unlike the exemption available in most other states, the Texas homestead exemption has no dollar limit. Texans can feel secure in their homes even if they have unpaid debts owed to third parties. There is a common misconception that this law prevents the IRS from seizing homes in Texas. The IRS’s ability to collect is…
Offer in Compromise Extends IRS Collection Time
When you owe the IRS back taxes, sometimes it is best to simply wait for the IRS’s collection statute to expire. This wait-and-see approach involves waiting to see if the IRS attempts to collect the tax debt. Sometimes the IRS doesn’t even bother to take any action to collect unpaid taxes. To succeed, it is…
Planning for Tax Refunds in Bankruptcy
The In re Porter, No. 16-11831-BFK (E.D. Va. 2017) case serves as a timely reminder that taxpayers who have unpaid tax debts and who are expecting sizable tax refunds may benefit from timing the filing of their bankruptcy cases. Facts & Procedural History The taxpayer filed her 2014 tax return on April 4, 2016. The…
Does Withholding on Wages Convert the Wages to a Tax?
The U.S. Bankruptcy Court recently considered whether amounts withheld from wages in excess of the amount of the income tax liability owed is a refund of tax or a refund of wages. The case is In re Crutch, No. 15-44523-cec. (E.D.N.Y. 2017). The case is a reminder to those taxpayers who are considering bankruptcy that…
Transferring Property Owned by Taxpayer With Unpaid Taxes
Buyers have to be careful when purchasing property subject to an IRS lien. The recent United States v. Urioste, No. 4:15-CV-1787-VEH (N.D. Ala 2017) considered the situation where a business purchased and improved real estate that was encumbered by an IRS tax lien. Facts & Procedural History The case relates to the tax liabilities of Mr.…
Taxpayer Retains Right to Tax Refund Claims Despite Bankruptcy Discharge
The bankruptcy-tax rules can present a number of opportunities. In Martin v. United States, Case No. 3:13-CV-03130 (C.D. Ill 2017), the court concludes that the taxpayers retained the right to sue the IRS for substantial tax refunds for taxes that were overpaid prior to their bankruptcy, despite having discharged their debts in bankruptcy. Bankruptcy &…
Continuation Theory: Collecting Taxes Owed by Prior Business
If a business has or expects to have a significant debt, it may transfer its assets and/or operations to a new business entity to try to avoid the debt. There are a number of non-tax cases where the courts have addressed this. The courts generally apply a “continuation” theory in these cases which asks whether…
Bankruptcy Court Rejects IRS Plan to Sell Residence
Bankruptcy can be a great way to get rid of older tax debts. The bankruptcy process is supposed to provide a fresh start. The In re Christensen, 15-29773, 15-29783 (2016 Bankr. D. Utah), case is an example where the IRS attempted to use the bankruptcy process not to provide a fresh start, but to collect…