When I get a modest inheritance, does a federal and/or state tax lien attach to it?: I have a federal tax lien, currently in not-collectible status, and am about to receive a modest inheritance for an amount far less than the lien. Does the lien attach to the inheritance? Can the IRS seize it?
Rex’s answer: Inheritances are generally not taxable; and, it is highly unlikely that the IRS will levy the funds if you avoid putting the funds in your bank account. If instead, you do deposit the funds into your bank account and the IRS decides to levy your account after that, they will be able to empty the account up to the amount of the levy. As for liens, these collection devices are used to make sure a taxpayer pays his back taxes if the real or personal property that has been liened is ever sold or refinanced. A lien is not imposed on an inheritance unless of course you inherited a house and it is put into your name and this comes to the attention of the IRS at some time if the future.
Is there a statute of limitations on how far back the FTB?: FTB wants payments for the years 2004,2005,2006,2008. The only records I have is the amount of tax, interest and penalties on the FTB paperwork. I haven’t any w2 or filed tax records. I am unable to get an online account to possibly see transcripts due to no filed taxes on record. Sent in 4506t to IRS but have a feeling I won’t get anywhere because it’s over 10 yrs. I got an earnings report from the SS office. How can I proceed?
Rex’s answer:
Based on your inquiry, I assume that you did not file a tax return in 2004, 2005, 2006 or 2008. There is no statute of limitations for an assessment if you did not file a tax return. As for collections, the FTB generally has a 20-year statute of limitations to collect undpaid tax liabilities. But, if the FTB adds new fees to the assessment, the 20-year statute of limitations may restart. Filing bankruptcy or entering into an installment agreement with the FTB suspends the statute of limitations.
As for filing back tax returns with limited information, I would recommend that you estimate your gross income to the best of your ability and consider being on the safe side that you are paying what you owe or even a little more. Then file the tax returns. If the FTB accepts your returns, you will be able to put this behind you after entering into a payment plan. Good luck!
Partner refused to file Form 1065 for dissolved CA general partnership – what are my options?:
California general partnership. Online store ran 2021–May 2022, now dissolved.
Ownership:
Partner A (50%) = designated Partnership Representative, handled taxes, only one with access to company PO Box
Me 30%
Wife 20%
I recently found out Form 1065 was never filed. IRS confirmed this on the phone.
Partner A claims “no need to file” because the IRS account shows $0 balance. We did a 3-way IRS call and I realized he framed the question as “we don’t owe money, right?” IRS said balance is zero because no returns were filed. When I asked directly about 1065, IRS said filing is mandatory and late filing = penalties. They offered to transfer us to legal; he refused.
He says his tax consultant told him filing isn’t required and that I’m “not a professional” so I shouldn’t question him.
He did file California sales tax, but no federal partnership return.
Questions:
Is there any situation where a partnership that operated over a year doesn’t have to file Form 1065?
How do I protect myself from penalties if the partner refuses to file?
Can a partner be held legally responsible for failing to handle tax compliance?
Tax attorney or CPA first?
Rex’s answer:
Below is the exception to the requirement to file form 1065 and is included in the IRS instructions that accompany Form 1065:
Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.
Note: To be certified as a qualified opportunity fund (QOF), the partnership must file Form 1065 and attach Form 8996, Qualified Opportunity Fund, even if the partnership had no income or expenses to report. See Schedule B, question 25, and the Instructions for Form 8996.