WC and IRS

[Bitzer]

Does anyone know if the IRS can touch your WC settlement for current taxes for this money or if you owe taxes from when I was married?

Bad question cause messing with the IRS is bad but I wondering if the can touch this settlement if I settle.

[White Light]

The answer is Yes! Clothing, furniture and personal effects worth up to $7,200. Tools of your Trade $3,600, Workers Comensation Benefits, Unopened mail, take home pay in excess of the amount of a standard deduction prorated to your pay period and annuities paid to recipients of the Medal of Honor.

When it comes to taxes the IRS will stop at nothing!

If you cannot pay in full, ever, you can submit an "Offer in Compromise." An Offer in Compromise is a settlement with the IRS where you pay less than 100 cents for every dollar that you owe, and the IRS forgives the rest. IRS will do this if they determine you are offering as much or more than they could collect from you through monthly payments or seizing your property.

The amount that you have to pay the IRS is an amount that represents the reasonable collection potential of your account. This is a lump sum equal to what you would get from the equity in all your assets, if they were sold at a quick estate auction or sale. Generally 80% of $10,000 minus the $5,000 owed = $3,000 PLUS 48 times what you could pay monthly on an installment agreement.

For example, if you had a car worth $10,000and owed $5,000 on it and nothing else and the IRS said you can make payments to them in the amount of $100 per month, you would have to offer 80% of $10,000 minus the $5,000 owed = $3,000 PLUS 48 Multiplied by $100 = $4,800 for a total of $7,800 on whatever you actually owed. You could make up to 24 monthly payments to 60 monthly payments for a total offer amount of $9,000 at $375 per month. How can someone who could only pay $100 per month be expected to pay $375 is a mystery to me.

There have been people whom owed a quarter of a million dollars in liability to the IRS, and the IRS accepted 1 cent on the dollar. Many others have not qualified, and the national average for accepted offers is about 17 cents on the dollar. Your own affairs may be more complicated, and it probably is if you add a home and 401k plan and a car that will be paid off in just a few years, you would have to go through this with every asset. Your case might also dictate an entirely different approach, including getting the whole account put on ice for a few years or filing bankruptcy.

If you want to hire a professional CPA or an attorney--stay away from the ones that advertise on TV. Their fees can be heart stopping.

Good Luck! I sure hope this helps......

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