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If i owe back taxes can the IRS take my settlement check?

Taunton, MA |

They said they will check the department of Revenue does that mean i wont get it?

my father signed papers to get his settlement check 10 days ago, i believe he was getting his check from liability, he fell into a covered hole at a house,he owes back taxes and they said they would have to check department of revenu to see if he owes child support since its been 10 days already hes worried that the IRS has taking the check because he ows back taxes, do you think they have found out hes getting a settlement and took the check? is this something they can do

Attorney Answers 3

  1. Your question is unclear as to what type of settlement is at issue; you need to provide more detail.

    Generally speaking, if your settlement is due to physical injury or illness and was the result of a tort (i.e., wrongful act, injury or action), then the settlement may not be taxable by IRS if the settlement was properly structured to meet code requirements. However, if the settlement was from a contract dispute or other income earning activities, the IRS can tax it.


    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

  2. It is difficult to say without more facts. If a levy is filed it is quite possible that will have to be paid first.

    Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

  3. It is possible that they found out about it and issued a levy to the payor. Whether or not they are entitled to do that would depend on the nature of the settlement. I strongly suggest you consult with a tax attorney.

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. Answering this question does not create an attorney-client relationship or otherwise require further consultation.

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