In certain cases when a married couple with an installment agreement cannot pay off the full amount, the IRS Chief Counsel can sometimes recommend that the IRS accepts the assignment of death benefits if one of the taxpayers dies.

In a recent case, one spouse of a married couple died before the installment agreement ended. The IRS wanted to seize all assets of the taxpayer covered by the agreement but was prohibited from doing so because the IRS Chief Counsel recommended that the IRS accepts the benefits from the deceased taxpayer’s life insurance policy instead.

Learn more about how you can qualify for IRS payment plans.

CCH (http://tax.cchgroup.com) reports:

Acceptance of Life Insurance Assignment Recommended

The IRS Chief Counsel has recommended that the IRS accept assignment of life insurance benefits in lieu of continuing the taxpayers’ installment agreement. The taxpayers, a married couple, had entered into an installment agreement that would not result in full payment. One of the taxpayers was terminally ill, and they proposed assignment of the death benefits of a life insurance policy to the IRS in satisfaction of their liability.

The IRS had no authority to terminate the existing agreement, or to seize assets of the taxpayers covered by that agreement, and immediate liquidation of the funds would not have satisfied the liability in full. Therefore, the Chief Counsel recommended that the IRS accept the offer of assignment of the death benefits of the taxpayers’ life insurance policy.

You can get help from our specialized staff of tax attorneys, CPAs, EAs and tax professionals at TRS. Visit Tax Resolution Services for a free income tax relief consultation or call us at 866-IRS-PROBLEMS (1-866-477-7762).

More Tax Help, IRS News and Tax Relief Tips:

1. IRS Tax Help From Tax Expert: What Individuals and Businesses Need to Know to Avoid Tax Problems
2. Tax Help For Offshore Account Holders as Swiss Government Seeks to Salvage UBS Agreement
3. IRS Offers Tax Help Guidelines to Taxpayers Who Are Filing Tax Returns Online
4. IRS Payroll Tax Problems: Are You a Responsible Party Liable for the Trust Fund Recovery Penalty?
5. Tax Help For Offer in Compromise Applicants: New IRS Changes to Processing

Tags: CCH, Installment Agreement, IRS Payment Plans, Michael Rozbruch, tax attorney, tax expert, tax help, tax resolution

This entry was posted on Tuesday, November 3rd, 2009 at 3:34 pm and is filed under IRS Installment Agreements, Seeking Professional Tax Help. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.