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<p class="MsoNormal"><span style="color:#1F497D">That is funny</span><span style="font-family:Wingdings;color:#1F497D">J</span><span style="color:#1F497D"> usually the governments threaten to lay off workers who everybody loves, like police and fire and music
teachers etc. I don’t imagine there will be much public outcry about laying off IRS workers.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="color:#1F497D">Roger Hawkes, WSBA # 5173<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">19909 Ballinger Way NE<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Shoreline, WA 98155<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><a href="http://www.hawkeslawfirm.com"><span style="color:blue">www.hawkeslawfirm.com</span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">206 367 5000<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Fax is 206 367 4005<o:p></o:p></span></p>
</div>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<div style="border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> Sam Furgason [mailto:sam@furgasons.com]
<br>
<b>Sent:</b> Monday, December 15, 2014 2:20 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv'<br>
<b>Subject:</b> Re: [WSBAPT] IRS and creditor claim<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">I haven’t been reading this thread, so this may have already been mentioned, but I recall seeing a couple of TV news stories recently where the IRS actually seized the bank funds of decedents’ grandchildren
decades after the alleged tax debtors’ deaths. Might have even included other relatives who never received anything from the tax debtors’ estates. It was made much of by the anti-IRS political crowd.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">On the other hand, in the $1.1 trillion budget bill just passed by Congress (Obama says he will sign it), the IRS budget was reduced by a big enough amount that the agency claims it will have to lay off a
whole bunch of people. FWTW.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">S <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">mailto:wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Tara<br>
<b>Sent:</b> Monday, December 15, 2014 1:20 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv'<br>
<b>Subject:</b> Re: [WSBAPT] IRS and creditor claim<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">The Internal Revenue Manual (IRM), Part 5 Collecting Process is a great resource, especially section 5.5 on Decedent Estates and Estate Taxes<o:p></o:p></span></p>
<p class="MsoNormal"><a href="http://www.irs.gov/irm/part5/">http://www.irs.gov/irm/part5/</a><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:12.0pt"><span style="font-family:"Book Antiqua","serif";color:#1F497D">Section 5.5.2.4 of the IRM states that “A state statute may not subordinate a federal tax lien to interests that Congress has not specifically permitted
to prime the lien. State law is nullified to the extent that it conflicts with federal law.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">Section 5.5.2.6 states that the IRS considers the family allowance an administrative expense of probate that the Service may *in its discretion* permit.<br>
<br>
The federal tax lien is created by operation of law, 26 USC 6321, and the collection period and assets subject to collection are usually determined according to the date that the tax is assessed. The Notice of Federal Tax Lien (NFTL) and the date of its recording
deal more with priority against other secured-type creditors. “The filing of a NFTL is not a step required to give rise to or to perfect the lien against the taxpayer. The act of filing protects the Government’s right of priority as against certain third
parties, typically a purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor. IRC § 6323(a).” IMR 5.17.2.3.1.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">Also, IRM 5.5.3.6 is helpful describing the priority of the tax with regard to estate property, based on the date of the tax assessment:<br>
If assessment is made: - Then the assessment lien attaches to:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">before death - property owned by the taxpayer and follows property into probate or to the transferee.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">after death - any probate property in the taxpayer's estate at the time of assessment.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">Litigation on the decedent’s Federal tax liability against the IRS will probably lead you off into Federal District Court to get an order binding against the Service. On the
other hand, I’ve talked to revenue agents that are just as confused by the probate process and collection priority as the rest of us are confused by the tax laws. Negotiating with a local revenue agent or collection officer for an allowance for the surviving
family will probably get you further and get more reassurance for the heirs, especially since collection efforts can follow to property in the hands of the transferee.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">Good luck!<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">Tara M. Roberts<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D">Puget Sound Law<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><a href="mailto:roberts@pugetsoundlaw.com">roberts@pugetsoundlaw.com</a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Book Antiqua","serif";color:#1F497D"><o:p> </o:p></span></p>
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<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">mailto:wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Marcus Fry<br>
<b>Sent:</b> Monday, December 15, 2014 11:47 AM<br>
<b>To:</b> 'wsbapt@lists.wsbarppt.com'<br>
<b>Subject:</b> [WSBAPT] IRS and creditor claim<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><a name="_GoBack"></a>IRS has filed a late creditor claim in probate proceeding (no real property to lien). Is the IRS subject to our 4-month creditor filing bar? If not, anyone successfully litigate a family allowance claim to trump
the debt owed to the IRS?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal" style="text-align:justify"><span style="font-size:10.0pt;font-family:"Courier New"">Marcus J. Fry<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Courier New"">Lyon, Weigand & Gustafson, P.S.</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Courier New"">P.O. Box 1689</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">
<br>
</span><span style="font-size:10.0pt;font-family:"Courier New"">Yakima, Washington 98907</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">
<br>
</span><span style="font-size:10.0pt;font-family:"Courier New"">Telephone: (509) 248-7220</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">
<br>
</span><span style="font-size:10.0pt;font-family:"Courier New"">Facsimile: (509) 575-1883</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">
<o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><b><u><span style="font-size:9.0pt;font-family:"Arial","sans-serif""><o:p><span style="text-decoration:none"> </span></o:p></span></u></b></p>
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