Can the IRS claim money that I receive for a personal injury settlement if I owe back taxes

Asked about 6 years ago - Weirsdale, FL

I am submitting an offer of compromise to the IRS for back taxes, I am also waiting to receive a settlement from an auto accident which occurred last year, the taxes were from 2002 thru 2005, will the IRS be able to take any of the compensation money that I receive from the accident?

Additional information

if I am not trying to do an offer in compromise, but public records show Fed tax leins, will the adjuster nont give me the money and pay the taxes instead?

Attorney answers (2)

  1. Robert Scott Williams

    Pro

    Contributor Level 12

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    Lawyer agrees

    5

    Answered . The short answer is yes. The IRS is a super creditor, and can reach pretty much any asset including your home and retirement accounts. You should make sure that the financial statement that you file with your offer in compromise clearly discloses the personal injury claim. Should the IRS accept your offer in compromise before you receive your settlement funds, they will not come back after the settlement proceeds. They will look to you to fulfill the terms of your offer in compromise. It is very important to disclose the personal injury claim along with your offer in compromise.

  2. Ryan Michael Barnett

    Contributor Level 7

    1

    Lawyer agrees

    5

    Answered . This is probably a question you should direct to your accountant.

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