Tucson, AZ asked in Tax Law for Arizona

Q: can the irs withhold back taxes on veterans disability payments

I was forced to include my va disability payments to calculate withholding for back taxes owed. This cost me an extra 1000 per month

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2 Lawyer Answers

A: The IRS is NOT taxing your VA disability benefits. They are collecting back taxes that you admit you owe. Rather than look the other way or otherwise ignore your VA benefit income, the IRS "forced" you to include the monthly payments you receive when they figured up how much you could afford to repay monthly. Look on the bright side: Pay the IRS all the back taxes you owe is a whole lot better than going to jail; right? Do NOT fight with the IRS. You will always lose.

Linda Simmons Campbell
Linda Simmons Campbell
  • Tax Law Lawyer
  • Burlington, CT

A: The IRS considers income from any source in calculating what funds are available to repay your tax debt. Frequently a tax professional can negotiate a lower monthly installment agreement payment then a taxpayer can get on their own. Most of us offer a free consultation. Stay away from the places you see advertised on TV, they often mislead their clients. Any good tax lawyer will tell you if they cannot do any better for you then you did on your own.

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