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Tucker Faces $11 Million IRS Bill

TMZ is reporting that actor Chris Tucker owes the IRS over $11 million, for taxes owed from his 2001, 2002, 2004, 2005, and 2006 tax years:

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According to the L.A. County Recorder’s Office, the lien issued against Tucker back in July 2010 is still active … which means, he still owes money … which means the government can legally seize his assets.

This statement isn’t entirely accurate. A federal tax lien puts the world on notice of the taxpayer’s debt and establishes IRS priority. In the event some of Tucker’s property subject to the lien is disposed, then the IRS may have a claim for the proceeds. Whether or not the IRS receives any of the proceeds depends on whether there are higher priority creditors. For example, the bank will almost certainly have priority over the IRS with respect to the proceeds from the imminent foreclosure of Tucker’s Florida mansion.

While a lien establishes priority, a Notice of Final Intent to Levy is what provides the IRS the right to seize a taxpayer’s assets. The notice provides appeal rights, which, if exercised within 30 days of the date of the letter, will establish a hold on collection while the matter is under consideration with IRS Appeals. At IRS Appeals, a taxpayer can negotiate a payment plan (e.g. Installment Agreement) or a settlement offer (e.g. Offer in Compromise) to address the outstanding balance. If appeal rights are not exercised, the IRS can and will proceed to levy on a taxpayer’s assets, such as funds in a bank account.

Although the Rush Hour star is laughing about his IRS problems now, I’m not so sure he would be if he disregards a Notice of Final Intent to Levy.

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