My 83 year old father-in-law has been diagnosed with terminal lung cancer, with less than a year to live. He has been on a payment plan with the IRS because no taxes were being taken out of his retirement income. Is there any type of debt forgiveness, or debt cancellation, for someone in his situation.
While he is still alive, if his income is being used largely to support himself (food, housing, medical insurance, out of pocket medical expenses, etc.), he may be able to request Currently Not Collectible status from the IRS. If granted, he would not have to continue making the monthly payments on his payment plan. If he does not qualify for Currently Not Collectible status but he does not have the resources to pay off the IRS debt, you may want to talk to a tax attorney about an Offer in Compromise. However, I recommend talking to a professional first because he might end up paying less if there will not be much in his estate.
After he passes, the IRS is limited to collecting against his estate. If there are no assets available that actually pass through his estate that are available to pay taxes, then the IRS simply writes off the remaining liabilities. Items like retirement accounts typically designate a beneficiary upon the death of the account holder and thus pass outside the estate.
My condolences for this unwelcome news about your father's health. I hope that you and he are able to get this matter resolved so you can focus on spending time together and not on tax issues.
Please note this information is general in nature and based solely on the information you have provided. This does not constitute specific legal advice.
The answer to your question depends on your father's assets and income. If he has the ability to pay then, sadly, the fact that he is terminally ill is not a reason to stop making payments. From the IRS's perspective they will want to collect as much as possible before they have to write off the debt. If this is not the case then you can have the IRS review the payment agreement. I recommend that you speak to a qualified tax attorney who can review the case to determine what options there are.
The information provided by the Law Office of Magda Abdo-Gomez on this web site is intended solely for informational purposes. Any information on this site is general in nature, and since the law is always evolving, may not reflect current legal developments or the current state of the law on the particular topic. None of the information provided on this website should be considered professional legal advice nor should it be relied or acted upon in any way without consulting qualified legal counsel. Neither transmission, nor receipt, nor use of the information on this site constitutes or creates an attorney-client relationship, nor is the information provided on this site an invitation to form an attorney-client relationship. The Law Office of Magda Abdo-Gomez encourages you to contact the office if you require legal counsel, however, none of the information you communicate to us by e-mail or in any other manner will be assured of confidential treatment until the Law Office of Magda Abdo Gomez acknowledges and agrees that an attorney-client relationship has been created. In fact, until such a relationship is established, we will assume that any information you send us is not confidential and that we may represent parties with interests which may be adverse to yours. Magda Abdo-Gomez is licensed only in the state of Florida. However, bankruptcy and tax laws are federal in nature.
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline