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Level 7
April 25, 2025
Solved

Collection Agency after client for Virginia taxes owed in 2006-2012

  • April 25, 2025
  • 5 replies
  • 27 views

It's an enormous amount, letter received from Harris & Harris on behalf of Virginia taxes owed. Client is aged sixty, in poor health, has little money. He owns a modest house with mortgage. He asked whether the collection agency can put a lien on his house. He asked if he should put his house in a trust. This is all over my paygrade.

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Best answer by BobKamman

I am sure some EAs and CPAs know how to research Virginia statutes.  They're easy enough to find online.  But a lawyer could do it in 15 minutes.  The statute of limitations used to be 20 years, but then in 2010 they changed it to ten years, and in 2016 to seven years.  But the changes weren't retroactive.  My guess would be that Governor Youngkin's tax collectors turned this over to a collection agency as a last gasp before at least some of it becomes uncollectible because the statute is expiring.  

5 replies

sjrcpa
Level 15
April 25, 2025

1. Does client owe the money?

Putting house in a trust now would be a fraudulent conveyance.

The collection agency can't put a lien on the house. Virginia can.

The more I know the more I don’t know.
sjrcpa
Level 15
April 25, 2025

See if there is a low income taxpayer clinic, maybe at a local university that could help client.

The more I know the more I don’t know.
qbteachmt
Level 15
April 25, 2025

Is he judgement proof? Here is the reference with a list of the exemptions that cannot be collected against and hardship info:

https://www.tax.virginia.gov/collections

 

Don't yell at us; we're volunteers
George4Tacks
Level 15
April 25, 2025

How much does the client owe IRS? Sounds like time to review doing Offer in Compromise with VA & IRS. Counsel them to NOT go for any of those phone calls about getting them out of debt.

If you can't offer the service,  help them seek out an Enrolled Agent or CPA that can do it for them. 

Answers are easy. Questions are hard!
BobKamman
Level 15
April 25, 2025

@George4Tacks isn't recommending contacting a lawyer because he was once bitten by one.  

BobKamman
BobKammanAnswer
Level 15
April 25, 2025

I am sure some EAs and CPAs know how to research Virginia statutes.  They're easy enough to find online.  But a lawyer could do it in 15 minutes.  The statute of limitations used to be 20 years, but then in 2010 they changed it to ten years, and in 2016 to seven years.  But the changes weren't retroactive.  My guess would be that Governor Youngkin's tax collectors turned this over to a collection agency as a last gasp before at least some of it becomes uncollectible because the statute is expiring.  

BobKamman
Level 15
April 25, 2025

When were the taxes assessed and what is the statute of limitations?

Does he acknowledge the debt?  Or is this the first he has heard about it?

Is he (still) in Virginia?

Have you checked to determine whether Virginia has already filed a lien on his property?