I receive social security disability prior to 2005, however, I owe Taxes for the year 2005 of approx. 15,000. A tax lien is pe

A tax lien attaches to all the assets of a delinquent taxpayer and is created automatically. If tax is assessed and the taxpayer fails to full pay the tax within 10 days after written demand by the IRS, a lien arises. The lien only becomes effective as to third parties and only has priority against people other than the taxpayer if a notice of federal tax lien is properly filed.

Even more important than the tax lien is the ability of the IRS to levy or take all or part of your social security. Believe it or not, even your social security disability is subject to collection by the IRS for back taxes. However, the IRS will allow you to keep the amount of money necessary to cover your basic living expenses according to national standards published by the IRS on their website. If the IRS sends notice that they intend to use the federal payments levy program and automatically take 15% of your social security payment you must respond or the automatic offset program will go into effect. If you call and object to the levy, you may be able to stop the process and have a collection officer review your financial circumstances.

It is important that you contact the IRS and provide any requested information about your financial circumstances. The amounts you can spend on housing and utilities as well as certain other expenses vary from place to place. Basically, you will be allowed to keep enough money to cover reasonable living expenses for the size of your family and the area in which you live.

Depending on whether or not your 2005 tax return was timely filed, the tax due for that may be dischargeable in a bankruptcy proceeding. This is an option you should explore as the social security disability payments are protected in bankruptcy . Tax debts due the federal government expire for collection after 10 years. For more information on tax debt expiration and discharge of tax in bankruptcy see the weblink included with this post.