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IRS levying after discharge
Hello CDCBAA:
Here's the followup to this letter.I reached the specialist. She said she needed to know what the cash value of the IRA and stocks were. I told her zero: the husband lost his job and drained it all for living expenses. Her response: "Thanks, that's all I needed to know. I'll go ahead and process their discharge now."- John D. Faucher818/889-8080
On Friday, August 19, 2016 6:07 PM, "John Faucher j.d.faucher@sbcglobal.net [cdcbaa]" wrote:
Hello Jon:Yes, this is a rule involving after-acquired property and choate versus inchoate liens. However, all that analysis seems to assume a live assessment underpinning the lien. Here, the assessment is discharged; the IRS can only go after the property that supports the lien. the 2/1/2016 petition date and now, in order to continue living. I don't think IRS can transfer the $40,000 worth of lien security to some other asset. I'm going to call the IRS bankruptcy specialist and inform her that the Service no longer has a lien in the 401(k), and ask her to go pound sand. - John D. Faucher
On Friday, August 19, 2016 5:08 PM, "jhayes@hayesbklaw.com [cdcbaa]" wrote:
Isn't there some rule about whether the assets or the lien or something is "inchoate." If it is (or isn't) then they can seize the property even if it's not the same property?
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Hello Jon:Yes, this is a rule involving after-acquired property and choate versus inchoate liens. However, all that analysis seems to assume a live assessment underpinning the lien. Here, the assessment is discharged; the IRS can only go after the property that supports the lien.I have since found out that my clients have drained their 401(k) between the 2/1/2016 petition date and now, in order to continue living. I don't think IRS can transfer the $40,000 worth of lien security to some other asset. I'm going to call the IRS bankruptcy specialist and inform her that the Service no longer has a lien in the 401(k), and ask her to go pound sand. - John D. Faucher
On Friday, August 19, 2016 5:08 PM, "jhayes@hayesbklaw.com [cdcbaa]" wrote:
Isn't there some rule about whether the assets or the lien or something is "inchoate." If it is (or isn't) then they can seize the pro
The post was migrated from Yahoo.
Hello all:Here's a new one on me.My client owed $160,000 in back taxes. I got him a chapter 7 discharge, wiping almost all of that out in May.arged taxes. IRS is taking the position that it had a notice of federal tax lien in place, so it was secured against his personal property; that personal property includes $15,000 in bank accounts, $40,000 in an IRA, $6,000 in equity in a car, and $4,500 in household goods. So IRS says it wants to levy on his personal property. To avoid that, it will enter into an installment agreement to pay off the value of the liens.I recall discussing this tactic while working for the Office of Chief Counsel; we then set it aside as completely impractical.Has anyone else seen this letter? I attach a copy of the redacted version. I'm inclined to tell the client to ignore the letter. Yes, it threatens a levy, but if IRS actually levies, it needs to ensure that it is only levying on property that he held at the time he filed his case. I am not sure that IRS can be so fine-tuned in its levy process.I suppose I can also have the fellow offer to turn over the personal property that the lien attaches to. I'd allow the lien to remain against the IRA. IRS will be uninterested in the car and the household goods; we'd have to fork over the financial accounts.I almost always want to do a collection due process hearing, but I wonder here whether it's worth it. It would raise the profile of this case, and IRS may forget about this if it doesn't get a quick payoff.I did get a similar letter a few months ago in a case involving real property; I called and faxed the specialist, and never got an answer. Here, the NFTL will remain on the property until IRS forgets about it and fails to renew the lien notice.If anyone has dealt with the IRS on this kind of negotiation, I'm interested to hear your experience. - John D. Faucher818/889-8080
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