I owe IRS back taxes with a payment plan. Can I keep any inherited money?

Question

The money comes from a trust, and I am a trustee. The money is not enough to pay off the debt I owe.

Answer 1

They can't touch the trust money until it is in your bank account and then only if they seize your whole bank account, which contains co-mingled funds from all income sources. If you are making your payments on time they shouldn't touch your bank account.

Answer 2

As long as you are properly set up on an IRS Installment Agreement, and as long as you continue to make payments and do not default on the agreement, then you can continue on that plan regardless of any other money you may have come to you.

Of course, if you can pay the tax debt off earlier, you will pay less interest to the IRS.

Answer 3

A payment plan is a legally binding contractual agreement. As long as you are meeting your obligations under the agreement, the IRS most abide by theirs. Their obligation is to accept the payments and cease any additional collection efforts. If you fail to make timely payments, they can resume collection efforts. Generally a trust is considered a separate entity and not a personal asset. I don't no if the courts would penetrate the trust to recover delinquent taxes.

Answer 4

Theoretical answer. No. useful answer, see you later as you're not to any extent further in default, they received't ask for a sparkling monetary plan (type 433A), so as that they ought to no longer learn about the inheritance. An inheritance isn't earnings, even with the actual incontrovertible reality that submit-lack of existence earnings on your percentage of the believe money will be earnings, for that you as trustee would ought to project a agenda ok-a million, yet probable the quantity of submit-lack of existence earnings isn't so cloth as to set off the choose for a sparkling monetary plan.