If a person owes $20k in taxes from several years ago...?

Question

But is going to get disability pay in the amount of about $26k, can they seize that disability? He plans on using that money for the funeral. If the IRS does not figure this out in time, can they come after the family for the $$? He's not married, so Mom is taking care of him. Thanks

Answer 1

They can probably take it.

Answer 2

What kind of disability?  It may or may not be subject to an IRS levy.  

The family is not liable for another person's debts unless property was transfered without consideration.  (This is leaglese but in plain English means if he gave Mom the money, IRS could go after it but she is not responsible just because she is the mom.)

This person may be eligible for a very unusual offer in compromise settlement based on effective tax administration.  The account might also be classified as not collectible depending on a number of factors.

Answer 3

If you have a payment arrangement in place with the IRS (or have been set up as currently not collectibe), you won't be subject to bank levies.  If you have ignored all mail from the IRS, you may find the money is seized.

As for expenses, funerals don't cost $26K.  They cost $7K and less if you economize.  That leaves $19K+ that wouldn't be a problem to pay the bulk of the tax bill.  The sooner the bill is paid, the less interest and penalties there are.  Leaving debt that could have been paid is a terribly legacy.

And, if he dies, the IRS will ask what assets he had.  If you say none, they will then ask who paid for the funeral.  

--->>Whose funeral?  He's not responsible for anyone else's funeral.  And the IRS debt comes first, not last in the debts he owes.  His plan is not a good one.