Are You Liable For Back Taxes With The Irs If You Are Over 65 And Make Under $26k A Year?
My mother is over 65 and owes the IRS back taxes. She makes under $26,000/yr. We have hired a law firm to negotiate with the IRS as she does not have the means to pay.She recently heard of a person (a friend of a friend) that found out after some research,that they are not liable because they are over 65 and make under either 24k or 26k per year. However, my mom’s attorney’s (who only deal with the IRS) neglected to mention this, so I’m not sure if it’s true. Possibly the law firm knows this and wants to collect fees anyway? Any info would really be appreciated.
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Tags : $26k, Back, Liable, Over, Taxes, Under, Year
Whoever that friend is, is no friend. They have totally incorrect information about being over 65 and making under either 24k or 26k and having no tax liability. What your mother could have as income and pay no tax, is the following. Single person – Standard deduction of $5,350, age 65 or older – additional deduction – $1,300, Personal exemption – $3,400. Total income she could earn and not pay federal taxes = $10,050. I believe that the amount the friend is referring to deals with taxability of social security benefits, not taxable income.
October 17, 2009 3:22 pm | #1First, is there any doubt as to whether or not she owes the taxes?
October 17, 2009 3:40 pm | #2The IRS will consider what they call an “offer in compromise”. Form 656 has the details.
You are always liable ask RED FOXX
October 17, 2009 4:35 pm | #3No such law exists.
October 17, 2009 5:15 pm | #4A) How much are the back taxes?
B) What does she own? (Personal property, house, retirement accounts)
If A > B, then she may qualify for an “Offer In Compromise” which is probably what the attorney is working on.
The person’s “research” is incorrect – being 65, or having income below $26K, does not get a person off the hook for paying taxes that they owe. No, the law firm is NOT just trying to get her money. They didn’t mention this because it’s just not true.
October 17, 2009 5:41 pm | #5The only thing I can think of that the person is talking about is that if you are on social security and your total OTHER income that ss is $25K or less, you don’t pay tax on your social security. You would pay on your other income though.
Not sure where you heard that but it’s not true. The attorney didn’ t mention it because it does not exist.
October 17, 2009 6:32 pm | #6i think you should be able to get answers to these questions by calling the irs. it is possible to ask them general questions, and talk to them anonymously. i have done this before. so if it worked for me it will probably work for you. the law firm is not going to turn away business, even if it is for something simple that most people can do for themselves. please let us know how this goes. good luck!
October 17, 2009 7:30 pm | #7Q. Are you Liable for back taxes with the IRS if you are over 65 and make under $26k a year?
October 17, 2009 7:50 pm | #8A. Yes
There are no such laws.
October 17, 2009 8:22 pm | #9I wouldnt bother with the law firm, get rid of them immediately. The IRS isnt interested in putting little old ladies out in the street. If you and she go to their offices and talk to them, they may work out a solution for you. Make sure you make them believe you want to do the right thing, that you are scared to death, and totally broke. They will actually cut you a better deal than the atty.
Whoever told you that anyone over 65 who makes less than so much per year is not liable was probably talking about the criteria for having to file an income tax return, which has nothing to do with owing back taxes.
October 17, 2009 9:20 pm | #10I was a volunteer for the IRS for six years, doing income tax returns for the low income and elderly through the VITA program. I agree with the previous answerer who said to get rid of the lawyer and talk to the IRS directly. They will work with you.
If your mother owes back taxes, her age is irrelevant. If she is unable to pay that is a different issue. If she has no assets and her income is low, based on IRS allowable expense standards, her account might be classified as currently not collectible or, if she was willing to offer an amount that represents the reasonable collection potential of the account, it could be settled for that lower amount. Email me through my profile if you want more details.
October 17, 2009 9:21 pm | #11Perhaps someone is confusing this with the “Do You Have to File” limits shown on page 12 of the 2006 1040 Instructions.
October 17, 2009 9:43 pm | #12Even so, those numbers are much lower ($9700 for a Single person 65 or over).
Somebody needs to negotiate with the IRS. If he law firm is a reputable local one, they will probably do a good job. If they are someone who advertises on TV and claims to be able to make unbelievable things happen, watch out.