Can the IRS take your workmans comp payout to pay back taxes?
The IRS has many powers, including the power to seize your tax return for various reasons. One power the IRS does not have is the ability to seize a person's worker's compensation to settle any back taxes owed. Worker's compensation is the monetary amount awarded to an individual by the company he/she works for when they were injured on the job, and it was caused by the fault of the company. The compensation is exempt from any levies by the IRS. The only way the IRS can seize something to settle back taxes is through taking away the tax refund of the individual. The only other ways they can do that is if the taxpayer owes accumulated student loans, and when child support bills are owed in excess.