I Didn’t Know I Owed IRS Debt Before My Wife Passed Away

Question:

Dear Steve,

My wife always took care of the finances for us. I just gave her my paycheck, last year, she passed away, and I had to learn about all the unpaid bills she had, including three different years owed to the IRS.

I’ve been making the payments, but now the ITR claims I missed a payment.

Today I received three letters from all three years, and they want $500 each.

My question is, how do I avoid a levy or a collection?

Anthony

Answer:

Dear Anthony,

I’m so sorry to hear about the loss of your wife and the rapid absorption of the financial surprises.

I feel confident your wife did the best she could under the circumstances.

Your situation is nuanced since I don’t know the whole situation regarding the IRS obligations. However, filing bankruptcy and discharging IRS debts is possible if they meet specific criteria. You’d need to discuss your case with a local bankruptcy attorney licensed to practice law in your state.

Tax situations can get complicated, so I would advise you to discuss your case with a tax professional to devise a game plan for resolving it in the best way.

If you don’t have a tax professional you use, you might want to find an Enrolled Agent.

An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.

An Enrolled Agent is a less expensive way of getting tax advice, so it is a good option.

If you are looking to enter a repayment plan with the IRS over these old debts, read How to Apply for an IRS Payment Plan.

You can create an extended IRS repayment plan online for low or no cost.

Sincerely,

You are not alone. I’m here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don’t give up.

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Damon Day - Pro Debt Coach