Tax Liens On WHole Life

theinuranceguy

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OH...IO
I was referred to a family this week with a problem. The husband passed away in January and they are still waiting on proceeds from his life insurance.

He had a UL policy with a waiver of premium rider, he has been disabled for over 20 years and has paid no premium since. The problem is that about 15 years ago the IRS put a Tax Lien on his cash value and the Insurance Company wouldnt release the death benefit until the family could prove that this lien was satisfied. I said no problem lets call the IRS.

IRS records only go back 10 years! So we called the Insurance COmpany to tell them that and they said well they need something that says this lien is satisfied.

We called the IRS again and asked the same thing. The answer was that our records dont go back that far. I then asked if we could get documentation that this man owed no taxes at the time of his death and we were told that they had to official document like that.

These people are close friends of the family. I told them I would ask a some other professionals to see what they thought.

SO you guys are my professionals, what do you think?
 
You are way out of your league here. Don't give advice you are not licensed or qualified to give. Tell the family to contact a good tax attorney who has contacts at the IRS. He or she will get it taken care of.

Al
 
Get professional help, lien should have been taken off if tax liability was over 10 years ago, statute of limitations with some exceptions.
 
I don't think you will be able to show the lien as satisfied. What you can show is the lien has expired.

What you will need to do is go to the county clerk's office where the lien was filed, and pull a copy for yourself. It's a public record so anybody can do this, may cost you $5.00 or so.

It will show the amount owed and the most important thing, the date filed.

By law, federal liens must expire after 10 years, most state liens run 7 years before they expire. Should state this on the document it's self. Provided they are not re-filed before expiration, which rarely happens due to the 7 or 10 year rule.

You should be able to provide a copy of the lien to the insurance company that shows the lien has in fact expired, rendering it un-enforceable.

You can do this process yourself without a lawyer, but if they or you feel uncomfortable doing so consult a tax attorney.

A general attorney won't have the expertise. If you do hire an attorney, at least pull a copy of the documents yourself. They will probably charge you an hour or two just to do
that.

Many counties today, you can get a copy of the lien online.

Not offering legal advice, just rendering my opinion
 
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Ok just got off the phone with the daughter. Its not a tax lean its a levy, and was never recorded with the county. I hate to drag myself into this, but the Insurance wants something that is not possible to get...

I told her that we should probably look into highering a tax attorney...

Thanks Guys, if you got any more ideas lemme know, Ill keep you posted.
 
This passage is from the IRS web site.


If we levy your wages, salary, or federal payments, the levy will end when:
  • The levy is released,
  • You pay your tax debt, or
  • The time expires for legally collecting the tax.
 
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