I have an IRS lien. Do I have any options?
March 9, 2017 12:04 PM Subscribe
I have a lien for $3457. Tax periods '06, '13, '14.
Date of assessment, respectively -'08, '14, '15.
Last day for refiling, '18, '24, 25.
Prepared and signed- April '16.
It has been just over 10 years since the '06 tax period. Is there a 10 year end of time period'? I have an installment agreement in place, including a few other years (the lien amount is included) Do I have any options? Recently married, but we were told spouse will not be responsible. Can we file jointly w/ this liability? Will this affect his return?
Is there a 10 year end of time period'?
What do you mean, like a statute of limitations? No. You're going to owe it until it's paid off.
What okayokaygive said about your spouse's tax returns. I was the spouse's exact situation.
What is your question? You're already on a payment plan. This is not dischargeable in bankruptcy. Eventually they'll garnish your state tax returns and a percentage of your wages. I'm surprised they haven't started doing the former. I'm not 100% sure but I think this impacts your ability to get loans (e.g. education) or other forms of federal assistance.
Anyway, call the # on your lien letter. They are surprisingly friendly at the IRS although they're probably hugely busy right now. If you just don't want to deal with it, consult a tax lawyer.
posted by AFABulous at 12:23 PM on March 9, 2017
What do you mean, like a statute of limitations? No. You're going to owe it until it's paid off.
What okayokaygive said about your spouse's tax returns. I was the spouse's exact situation.
What is your question? You're already on a payment plan. This is not dischargeable in bankruptcy. Eventually they'll garnish your state tax returns and a percentage of your wages. I'm surprised they haven't started doing the former. I'm not 100% sure but I think this impacts your ability to get loans (e.g. education) or other forms of federal assistance.
Anyway, call the # on your lien letter. They are surprisingly friendly at the IRS although they're probably hugely busy right now. If you just don't want to deal with it, consult a tax lawyer.
posted by AFABulous at 12:23 PM on March 9, 2017
Oh, P.S., if you do file jointly and they take your return to pay off your tax obligations, in a divorce your spouse may be able to get this money back (from you) in the divorce settlement. That's what I did and he owed me thousands of dollars.
posted by AFABulous at 12:25 PM on March 9, 2017
posted by AFABulous at 12:25 PM on March 9, 2017
The IRS must assess the tax within 3 years of the later of the due date of the return or the date of filing (or 6 years for a substantial understatement) - the assessments seem to be within the allowable statute of limitations period. Then they have 10 years to collect on the assessment (though this can be tolled/extended for various reasons, like while the year is under an installment agreement).
You can file jointly now and, if you're jointly due a refund, your spouse can file for injured spouse relief so that the portion of the refund that relates to their tax withholding/liability isn't used to offset your past due balance. However, you should check with a CPA or tax attorney regarding your specific situation, especially if you live in a community property state.
It's not clear from your question whether the installment agreement covers the years to which the lien relates? Being current with your installment agreement should halt all collection activities with respect to the years covered by the agreement. So, as a first step, I'd contact them (there is likely a number on the latest notice you received) to make sure that all past-due years are included in the installment plan. (This assumes you've filed the required returns for the past-due years; if not, do that ASAP.)
posted by melissasaurus at 12:37 PM on March 9, 2017
You can file jointly now and, if you're jointly due a refund, your spouse can file for injured spouse relief so that the portion of the refund that relates to their tax withholding/liability isn't used to offset your past due balance. However, you should check with a CPA or tax attorney regarding your specific situation, especially if you live in a community property state.
It's not clear from your question whether the installment agreement covers the years to which the lien relates? Being current with your installment agreement should halt all collection activities with respect to the years covered by the agreement. So, as a first step, I'd contact them (there is likely a number on the latest notice you received) to make sure that all past-due years are included in the installment plan. (This assumes you've filed the required returns for the past-due years; if not, do that ASAP.)
posted by melissasaurus at 12:37 PM on March 9, 2017
Response by poster: Yes, all years owed are included in the installment agreement.
posted by ebesan at 12:41 PM on March 9, 2017
posted by ebesan at 12:41 PM on March 9, 2017
Have you called them yet? Is this your first time defaulting on the installment agreement?
posted by corb at 12:45 PM on March 9, 2017
posted by corb at 12:45 PM on March 9, 2017
Response by poster: Haven't defaulted on the installment agreement. It has been in place about a year.
posted by ebesan at 12:54 PM on March 9, 2017
posted by ebesan at 12:54 PM on March 9, 2017
Response by poster: The lien predates the installment agreement.
posted by ebesan at 12:58 PM on March 9, 2017
posted by ebesan at 12:58 PM on March 9, 2017
Did you actually file for those years? Because if not you might not owe as much as they think.
(I had my wages garnished for back taxes once upon a time but once I actually filed for those years I ended up getting a lot of that money back.)
posted by mskyle at 12:58 PM on March 9, 2017
(I had my wages garnished for back taxes once upon a time but once I actually filed for those years I ended up getting a lot of that money back.)
posted by mskyle at 12:58 PM on March 9, 2017
I would definitely get someone on the phone. If you're on an installment plan, it should cover the stuff from before. Have you gotten any notices about the lien since the start of the installment agreement?
posted by corb at 1:02 PM on March 9, 2017
posted by corb at 1:02 PM on March 9, 2017
So you filed for all back years, got a lien, then got an installment agreement that also covers the lien amount? I still don't understand your question. You can't continue to pay, or what? Can you just restate it clearly?
posted by AFABulous at 1:06 PM on March 9, 2017 [4 favorites]
posted by AFABulous at 1:06 PM on March 9, 2017 [4 favorites]
Do call the IRS. They give wonderful service with an encouraging tone. Really.
You'll have to wait on the line a long time. Be ready to take down the person's "agent number."
posted by jgirl at 2:27 PM on March 9, 2017 [1 favorite]
You'll have to wait on the line a long time. Be ready to take down the person's "agent number."
posted by jgirl at 2:27 PM on March 9, 2017 [1 favorite]
For the sake of sanity, "return" is the paper you file with the IRS, "refund" is any money you might get back.
Let me say that the other way too. The papers you send the IRS are your "return." If you're due any money back, that's called your "refund."
So no, your tax situation can't affect his "return," if you mean that he is filing separately. But as others are saying, it might affect his refund if you're filing jointly, unless you take steps to prevent that.
posted by JimN2TAW at 2:40 PM on March 9, 2017 [2 favorites]
Let me say that the other way too. The papers you send the IRS are your "return." If you're due any money back, that's called your "refund."
So no, your tax situation can't affect his "return," if you mean that he is filing separately. But as others are saying, it might affect his refund if you're filing jointly, unless you take steps to prevent that.
posted by JimN2TAW at 2:40 PM on March 9, 2017 [2 favorites]
To be more precise, do call the Taxpayer Advocate, which is a mandated department of the IRS which will give you advice on how to deal with your tax problem. They're good people.
posted by grubby at 3:59 PM on March 9, 2017
posted by grubby at 3:59 PM on March 9, 2017
Payment plan or not you will still have a lien. Once you pay it off the lien is released. They will keep your tax refund, if any.
posted by patnok at 6:36 PM on March 9, 2017
posted by patnok at 6:36 PM on March 9, 2017
Do I have any options?
Options for what? It's hard to tell what your question is. You have an installment plan that includes a lien, right? You just have to keep paying it until it's all paid off. And like okayokayigive notes, your spouse's tax refunds would be applied to this lien unless they file Form 8379, Injured Spouse Allocation. There's another form for Innocent Spouse Relief but for reasons that only make sense to the IRS, the bizarrely-named Injured Spouse form is what you file when your spouse has a past-due IRS obligation.
But as others are telling you, the IRS is actually badass and awesome about answering these types of questions. It's worth taking the time to have them talk you through any issue. Once I called in a panic because I was being audited and they were asking me for $5,000 in back taxes. During my call the nice IRS person saw they had made an error and actually owed me $2,000. Always call them.
posted by yes I said yes I will Yes at 2:01 AM on March 10, 2017
Options for what? It's hard to tell what your question is. You have an installment plan that includes a lien, right? You just have to keep paying it until it's all paid off. And like okayokayigive notes, your spouse's tax refunds would be applied to this lien unless they file Form 8379, Injured Spouse Allocation. There's another form for Innocent Spouse Relief but for reasons that only make sense to the IRS, the bizarrely-named Injured Spouse form is what you file when your spouse has a past-due IRS obligation.
But as others are telling you, the IRS is actually badass and awesome about answering these types of questions. It's worth taking the time to have them talk you through any issue. Once I called in a panic because I was being audited and they were asking me for $5,000 in back taxes. During my call the nice IRS person saw they had made an error and actually owed me $2,000. Always call them.
posted by yes I said yes I will Yes at 2:01 AM on March 10, 2017
Response by poster: Response-
I have had an installment agreement in place for a year, for 6 unpaid years.
The lien is for 3 of them; i.e. the installment plan includes a lien.
I filed for all the back years, could not pay them, got a lien for 3, then got an installment agreement, that also includes the lien.
We can now-
1. file jointly, and are jointly due a refund. Can he THEN file for injured spouse relief so that the portion of his refund is not used to offset my past due balance? But will this affect his kid's college credits?
or 2. file separately, which will lower my refund?
There is no animosity here; we just want a firewall between our obligations.
I can file Form 8379, (or 8857?) Injured Spouse Allocation. I am told do it separately from the joint return. Should it be filed AFTER?
posted by ebesan at 11:27 AM on March 10, 2017
I have had an installment agreement in place for a year, for 6 unpaid years.
The lien is for 3 of them; i.e. the installment plan includes a lien.
I filed for all the back years, could not pay them, got a lien for 3, then got an installment agreement, that also includes the lien.
We can now-
1. file jointly, and are jointly due a refund. Can he THEN file for injured spouse relief so that the portion of his refund is not used to offset my past due balance? But will this affect his kid's college credits?
or 2. file separately, which will lower my refund?
There is no animosity here; we just want a firewall between our obligations.
I can file Form 8379, (or 8857?) Injured Spouse Allocation. I am told do it separately from the joint return. Should it be filed AFTER?
posted by ebesan at 11:27 AM on March 10, 2017
The IRS Form 8379 form says the spouse who does NOT have a past-due obligation files this WITH their joint tax return:
Form 8379 is filed by one spouse (the injured spouse) on a jointly filed tax return when the joint overpayment was (or is expected to be) applied (offset) to a past-due obligation of the other spouse...
How To File
You can file Form 8379 with your joint tax return or amended joint tax return (Form 1040X), or you can file it afterwards by itself. File Form 8379 with Form 1040X only if you are amending your original return to claim a joint refund. If you file Form 8379 with your joint return, attach it to your return in the order of the attachment sequence number (located in the upper right corner of the tax form). Enter “Injured Spouse” in the upper left corner of page 1 of the joint return.
At this point, though, you should just call the IRS and have them talk you through it. Better yet, pay someone to do your taxes.
posted by yes I said yes I will Yes at 3:37 AM on March 11, 2017
Form 8379 is filed by one spouse (the injured spouse) on a jointly filed tax return when the joint overpayment was (or is expected to be) applied (offset) to a past-due obligation of the other spouse...
How To File
You can file Form 8379 with your joint tax return or amended joint tax return (Form 1040X), or you can file it afterwards by itself. File Form 8379 with Form 1040X only if you are amending your original return to claim a joint refund. If you file Form 8379 with your joint return, attach it to your return in the order of the attachment sequence number (located in the upper right corner of the tax form). Enter “Injured Spouse” in the upper left corner of page 1 of the joint return.
At this point, though, you should just call the IRS and have them talk you through it. Better yet, pay someone to do your taxes.
posted by yes I said yes I will Yes at 3:37 AM on March 11, 2017
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Source: joint return with my new husband paid off the remainder of my IRS tax debt last month, with his enthusiastic consent.
posted by okayokayigive at 12:10 PM on March 9, 2017 [2 favorites]