Oregon Tax Legal Questions

The IRS has the power to put a lien against your house, to foreclose on your house, to take your business, savings and garnish your wages among other things. However, they will notify you first and you'll be able to determine what the basis of their claim is and whether it's correct. Once you and the IRS agree on the amount due, you'll be able to work out a payment plan based on your income... Read More

There are limits on what the IRS can take. They can only garnish a maximum of 25% of your wages. There are protections for certain amounts of bank accounts, cars, clothes, furniture, etc. 401(k)s and other retirement plans are exempt. However, unless you are a flight risk, the IRS doesn't start by garnishing your wages or seizing your bank account. It starts by sending you letters, notifying you what they think you owe. Your choices are 1. Pay what they claim, 2. Work out a payment plan, 3. Dispute the claim (often the IRS numbers are estimates or you have information on deductions, etc. that the IRS doesn't) or 4. The ever popular "ignore it and hope it goes away" Only if you chose #4 will you find your assets being taken by the IRS.... Read More

The first question is when was the mortgage forgiven? If this was in 2013 or older then there is probably no tax due on the transaction. But you're required to report it and show that it wasn't taxable. If it was in 2014, all or part isn't taxable if your debts exceeded the value of your assets when the loan was forgiven. In either case, you need to consult a tax attorney or a CPA who's familiar with tax law.... Read More

There are two different types of IRS levy: the levy on wages takes a certain percentage of your gross income per pay period and leaves you the rest. It continues until it is released by the IRS. The bank levy takes all the money in your bank account on the day the bank receives the levy. It is only good for one day.... Read More

Here is a good summary from Nolo.com Compensation for Physical Injury is Not Taxable As a general rule, the proceeds received from most personal injury claims are not taxable under either federal or state law. It does not matter whether you settled the case before or after filing a lawsuit in court. It doesn't matter if you went to trial and won a verdict. Neither the federal government (the IRS), nor your state, can tax you on the settlement or verdict proceeds in most personal injury claims. Federal tax law, for one, excludes damages received as a result of personal physical injuries or physical sickness from a taxpayer's gross income. This means typical personal injury damages that are meant to compensate the claimant for things like lost wages, medical bills, emotional distress, pain and suffering, loss of consortium, and attorney fees are not taxable as long as they come from a personal injury or a physical sickness. A physical sickness means a claim for an illness. If, for example, you were negligently exposed to a germ that made you sick, any damages that you recover as a result of that illness would not be taxable. Exceptions to the General Rule Even if you suffer a physical injury or physical sickness, you will be taxed on damages relating to a breach of contract if it is the breach of contract that causes your injury, and the breach of contract is the basis of your lawsuit. Further, punitive damages are always taxable. If you have a punitive damages claim, your lawyer will always ask the judge or jury to separate its verdict into compensatory damages and punitive damages. That ensures that you can prove to the IRS that part of the verdict was for compensatory damages, which are not taxable. One other portion of a personal injury verdict that is taxable is interest on the judgment. Most states have court rules that add interest to the verdict for the length of time that the case has been pending. For example, if you filed your suit on January 1, 2012, you would generally receive interest on the verdict starting from January 1, 2012, and running until you receive payment. If you won at trial on January 10, 2013, but the defendant appealed and did not end up paying you until March 31, 2014, you would receive two years and three months of interest on the amount of the unpaid verdict. This interest is taxable. Claims for Emotional Injury Only Remember that the settlement or verdict is non-taxable only as long as it arose from a physical injury. If, for example, you have a claim for emotional distress or employment discrimination, but no actual physical injury, then your settlement or verdict would be taxable unless you can prove even the slightest amount of physical injury. Ensure That as Much of Your Settlement as Possible is Non-Taxable Sometimes you might have two claims against the defendant, one of which relates to a personal injury and one of which does not. In this case, especially if the personal injury claim is much larger than the non-personal injury claim, you would want to explicitly state in the settlement agreement what amount of the settlement relates to the personal injury claim and what amount of the settlement relates to the non-personal injury claim. While the IRS can always challenge the non-taxability of a settlement, specifically allocating your settlement like this gives you the best chance of having most of the settlement excluded from taxation. I hope this helps.... Read More

You didn't mention which government was "freezing" his bank account - the State of Virginia taxing authority or the IRS. If it was the IRS, they can "freeze" his accounts regardless of where he lives. If it's the State of Virginia (i.e., its revenue department) they can certainly do the same thing. Either organization is a "creditor" and they can, by using whatever process the state allows, attach accounts wherever your son-in-law lives or can be found.... Read More

Are you talking about state taxes or federal taxes? I presume you are talking about income taxes in any case. You can contact the taxing authority (the IRS or the Missouri Department of Revenue) as see if each organization will allow you a "payment plan." Normally, you can arrange this and make payments on the unpaid taxes. If, however, you miss a payment, you run the risk of a levy - i.e., they simply take the money owed out of your bank account, if you have one. If you do nothing, the IRS will do whatever it takes to collect the back taxes. The Missouri Department of Revenue will do the same thing so make arrangements right away.... Read More