Can Irs Keep My Inheritance For Back Taxes?


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Lia Louis answered
Unfortunately, the short answer to this is yes. When you say "back taxes", if you are referring to tax that you are required to pay through money earned via employment, then usually, the IRS have the right to take the money that is owed to them and rightfully theirs and it doesn't matter where that money comes from originally; ie: Inheritance.

Let's say that you owe $1000 in back taxes from employment that you never got around to paying. Because of the outstanding amount, you are in debt to the IRS and they will require their money paid in full. If you are waiting on $2000 in inheritance money that is not yet in possession, then the IRS cannot touch this. This means if your $2000 is wrapped up in a loved one's house that has just passed away, the IRS cannot take the money from the house. However, they may have the right to take the money once it is released to you and placed into your bank account.

When you are in debt to the IRS, they usually have a right to obtain any money that is owed to them if it is in your name. So for example, if the IRS find 3 bank accounts and one savings account in your name, they are able to request and/or claim this money. So when your inheritance is passed onto you and is transferred into your name, the IRS could at any point, request the money is given to them to re-pay your debt.

In situations like these, it is always recommended to contact the IRS and face up to the amount you owe, as the IRS will keep chasing you until the amount is paid. Sometimes, you can arrange to re-pay your back taxes in small monthly installments, and if you arrange this and stick with the payments, they are very unlikely to suddenly seize money from your account and you won't have to worry about having something meaningful such as inheritance taken from you.

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