OKVacationer
New Member
This is a tax question, but some background needs to be given.
In June, my mother-in-law (MIL) was diagnosed with terminal cancer. She is deteriorating rapidly. She is 70.
She lives on the other side of the state near my husband's sister. The sister was made power-of-attorney because MIL's mental status is wavering and deteriorating.
In going through her financial records, it was discovered that MIL was in dire financial straits. This was a shock because she and my husband's father divorced 5-6 years ago. Father-in-law gave her the majority of the investments they had jointly, one of the two homes they owned (which she sold), a chunk of money, plus pays her $2200 a month alimony.
Nearly one-third of a million dollars is gone. She also racked up significant debt including $25,000 in credit cards, $40,000 to the IRS in back income taxes, and a $25,000 IRS lien against her personal property. Supposedly she gambled everything away and incurred the debt at local casinos.
She was still receiving alimony, receiving Social Security ($850), and also was employed full time prior to her diagnosis. She had been making monthly payments to the IRS via automatic draft. She has no assets except a car that is 14 years old and barely runs. She rents her home.
While she has Medicare, she failed to sign up for supplemental insurance and also did not sign up for the Medicare drug plan. Her medications and care have been astronomical because of these things. The first month medications were $700. She now needs medical equipment and home health nursing care.
That is all background for this: Three certified letters have now been sent by the IRS because her autodrafts have "bounced." They are threatening to sue her and have tacked on another $9,000 in penalties and interest.
My sister-in-law has tried to contact the IRS but has been very frustrated, being on hold for hours, transferred only to have the call drop, being told the person who needed to answer her question was not available, etc. She is frustrated beyond belief.
She contacted two separate tax attorneys, and both told her they would want a hefty retainer before they would even look at the case because it was such a mess.
To complicate things further, a social worker informed them that in order for her to qualify for Medicaid, her income would need to be below $900. Father-in-law was supposed to see an attorney to draw up an agreement for alimony to cease upon mutual agreement. He has not done so. No one knows why. He lives in another state. One tax attorney told sister-in-law during a phone call that the IRS could potentially sue father-in-law for back alimony, if he stops payment, so that they could seize it from her and apply it to the debt.
Finally, there is an account that was supposed to contain money for the grandkids' college funds (I don't know what type of account) that has father-in-law and mother-in-law's name on it, instead of the kids' names, and from what I understand it is also in danger of being seized.
In the midst of trying to survive ourselves and help out with her care as much as we can, we have nothing left to hire an attorney.
We know they can levy her Social Security up to 15%, but what else can the IRS do? Is there anything that can be done? Can they come after the family members?
Thank you in advance, and my apologies for this long post.
In June, my mother-in-law (MIL) was diagnosed with terminal cancer. She is deteriorating rapidly. She is 70.
She lives on the other side of the state near my husband's sister. The sister was made power-of-attorney because MIL's mental status is wavering and deteriorating.
In going through her financial records, it was discovered that MIL was in dire financial straits. This was a shock because she and my husband's father divorced 5-6 years ago. Father-in-law gave her the majority of the investments they had jointly, one of the two homes they owned (which she sold), a chunk of money, plus pays her $2200 a month alimony.
Nearly one-third of a million dollars is gone. She also racked up significant debt including $25,000 in credit cards, $40,000 to the IRS in back income taxes, and a $25,000 IRS lien against her personal property. Supposedly she gambled everything away and incurred the debt at local casinos.
She was still receiving alimony, receiving Social Security ($850), and also was employed full time prior to her diagnosis. She had been making monthly payments to the IRS via automatic draft. She has no assets except a car that is 14 years old and barely runs. She rents her home.
While she has Medicare, she failed to sign up for supplemental insurance and also did not sign up for the Medicare drug plan. Her medications and care have been astronomical because of these things. The first month medications were $700. She now needs medical equipment and home health nursing care.
That is all background for this: Three certified letters have now been sent by the IRS because her autodrafts have "bounced." They are threatening to sue her and have tacked on another $9,000 in penalties and interest.
My sister-in-law has tried to contact the IRS but has been very frustrated, being on hold for hours, transferred only to have the call drop, being told the person who needed to answer her question was not available, etc. She is frustrated beyond belief.
She contacted two separate tax attorneys, and both told her they would want a hefty retainer before they would even look at the case because it was such a mess.
To complicate things further, a social worker informed them that in order for her to qualify for Medicaid, her income would need to be below $900. Father-in-law was supposed to see an attorney to draw up an agreement for alimony to cease upon mutual agreement. He has not done so. No one knows why. He lives in another state. One tax attorney told sister-in-law during a phone call that the IRS could potentially sue father-in-law for back alimony, if he stops payment, so that they could seize it from her and apply it to the debt.
Finally, there is an account that was supposed to contain money for the grandkids' college funds (I don't know what type of account) that has father-in-law and mother-in-law's name on it, instead of the kids' names, and from what I understand it is also in danger of being seized.
In the midst of trying to survive ourselves and help out with her care as much as we can, we have nothing left to hire an attorney.
We know they can levy her Social Security up to 15%, but what else can the IRS do? Is there anything that can be done? Can they come after the family members?
Thank you in advance, and my apologies for this long post.
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