The Tax Levy
The Levy is a powerful tool available to the IRS to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office. There are many different types of assets that the IRS can levy. One of these categories are Retirement Accounts. Some people believe that the IRS cannot touch retirement accounts, however, that is not true. Today, we’ll discuss what the IRS can and cannot levy in regards to Retirement Accounts.
The IRS and Retirement Accounts
The IRS is exempt from the anti-alienation provisions of REISA have no effect against an IRS levy. As a general rule, the IRS does not like to take monies from a retirement plan, but this “may” be an option for the IRS. Essentially, the IRS has the right to step into the shoes of the taxpayer. If the taxpayer can liquidate an account (with or without a penalty), then the IRS can liquidate an account. If the taxpayer can’t, then the IRS can’t.
Most IRA’s can be levied. For 401(k) and 403(b) plans, the IRS steps in the shoes of the taxpayer and has the same rights as the taxpayer to liquidate or withdrawal funds from the account. In general, if taxpayers do not have access to an amount in a pension plan, neither does the IRS. On a positive note, if the IRS withdraws funds from your retirement account, you will not be subject to an early withdrawal tax penalty.
Do You Need Help?
Have you been levied or are you under threat of a levy? We’ve been able to help numerous taxpayers such as yourself get levy relief. If you need help with a levy or IRS Collection issue, we’d be happy to talk with you. Please give me a call at (972) 821-1991 or email me at bob@jablonskyandassociates.
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