Can The IRS Take The Lease??


#1

My question is,...If you had received some royalties and failed to pay the IRS tax on them within the year you cashed the check, would they seize the property and make you sell the property to get their money or go after the owner of the lease and seize his or her assets to get their money back??

Thanks guys for any advise on this!!


#2

If you received royalties, then you should have also gotten a 1099 from the oil company in your name and social security number reporting the royalty income. If you owe federal income taxes and fail to pay, then the IRS can seize any of your assets. Usually will start with easiest asset, such as bank accounts.


#3

Thank you Tennis! what if your deceased and bank accounts were emptied and closed...property next??


#4

they will attach a lien to any property that was in the deceased's estate. Then, depending on the size of the tax debt, they could sell property to settle the debt. Usually, they will contact the executor of the estate and expect payment from that individual, because State law doesn't let an executor close the accounts and distribute proceeds until all debts are paid.


#5

Thanks again James I appreciate the insight, I was afraid that's what they would probe do but never being in this type of situation I thought id ask :))


#6

I see a few owners in an "IRS LEVY" status. Essentially, the IRS takes over receiving the royalties until a persons taxes are paid. This is probably not from failing to pay income tax on royalties, but failing to pay income tax on all income. In a state like Texas, beware, because the operator reports to the appraisal district / tax office the address of the IRS instead of your personal address. The IRS will NOT pay your property tax bill. A royalty owner is still responsible for their property tax, even if they are not receiving the income due to the IRS levy.


#7

Thanks Kitchen I appreciate that, very interesting, hmmm :))


#8

Sorry if I’m interrupting but kinda had a similar question except if some of the royaltys are paid to a corporation or LLC and interest was sold by sole proprietor with warranty deed who is responsible if you developed the asset yourself and enter bankruptcy? Tricky question. Any input would be helpful?