Tax Collections And Older Adults



The prospect of IRS tax collection is unsettling enough, but even more so if you’re an older adult on limited income or are caring for an older loved one.

An older adult who relies on Social Security retirement income or Social Security disability income may find themselves owing taxes, even if they don’t have the means to pay them. Events such as lump sum distributions or proceeds from selling a home may bump them into a higher tax bracket for the tax year and leave them with the tax bill to show for it.

As with any other outstanding tax matter, older adults could find themselves subject to levy of their income and assets for unpaid taxes. While the IRS does have processes in place to protect low-income older adults from levy of the Social Security income, the system isn’t foolproof. Working with a qualified tax pro is critical to avoid unfair levy of income and assets.

In other instances, up to 15% of Social Security benefits could be levied for non-payment of tax debt.

While contacting a tax pro is crucial under these circumstances, there are at least two options for you to be aware of.

  • Form 433-F and Currently Not Collectible (CNC) status. You will disclose all of your assets, income and expenses. If the IRS determines that you can’t meet your essential expenses AND the text debt obligation, your case will be designated as CNC.
  • Establishing Doubt as to Collectivity: A tax pro reviews your income and assets. If your income and assets combined are less than the tax debt owed, your tax pro will file the necessary paperwork with the IRS. “Doubt as to Collectivity” essentially refers to the unlikely chance of collecting on the tax debt in question.

Tax debt collection at any age is stressful. Older adults who are living on fixed incomes with limited (or no) employment options are especially vulnerable, and are more likely to need third-party assistance in resolving those debts. If you are caring for an older loved one or if you are an older adult facing IRS collection actions, it is critical that you have a qualified tax pro by your side.

Don’t go it alone. We have a staff of  tax pros, including Enrolled Agents and tax attorneys who can help you or a loved one navigate the IRS debt collection maze. Learn about the options available to you or a loved one by calling us at (888) 224-3004 or by clicking the white “Start Chat” button in the upper right hand corner of our webpage.




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