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I owe the irs on back taxes i just received an inheritance if i make a payment plan can they collect on my inheritanc

Belton, MO |

i am working out a payment plan with the irs for my back taxes, its not over 12,000 , i also just recently received an inheritance which is under 100,000 dollars.. if i make this deal can the I.R.S void our deal and collect on my recent gain being im going to have to pay taxes on the inheritance as well

Attorney Answers 2


  1. Receiving an inheritance will generally not terminate an otherwise acceptable installment plan with the IRS. If you enter into an installment agreement with the IRS to pay your back taxes, the IRS will not take any enforced collection activities against you so long as you make all of your installment payments on time, and that includes not attempting to seize your inheritance.

    Also, I'm not sure why you believe you'll have to pay taxes on the inheritance? You may have state tax to pay, but you almost certainly won't have federal tax to pay because the federal estate tax is a tax imposed on the estate, not on the beneficiaries of the estate. There are some exceptions to this general rule, but the general rule covers most cases.

    All of that being said, I'm not sure why you wouldn't use money from your inheritance to pay off your back taxes. Even when you're in an installment payment plan, interest is still accruing on the unpaid taxes. Furthermore, if the IRS hasn't done so already, they will almost certainly file notices of federal tax liens against you as part of the installment plan. Federal tax liens hurt your credit and will remain on your credit history the same as any other negative credit information. Given all that, I am not sure I understand why you wouldn't simply use some of the money from your inheritance to just pay off all of the back taxes and be done with them for good.


  2. I agree with the prior attorney. This inheritance will not impact the installment plan. But financially speaking it would be foolish for you not to pay off the entire debt immediately.

    Hope this helps.

    Please remember to designate a best answer to your question.

    Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website for more tax, estate and business articles is www.sjfpc.com. and his blog is

    LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

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