Can The IRS Take Life Insurance Payout? 
If the insured person leaves their death benefit to a person as beneficiary on their policy , the IRS can not generally take the life insurance proceeds away from that person . If the beneficiary shared in the obligation to the government -LRB- e.g. was joint signer on tax returns and there were unpaid back taxes at the time of death of the Insured -RRB- , then the IRS might go after those funds . 