WHAT ASSETS IS THE IRS ALLOWED TO SEIZE TO PAY MY TAX DEBTS, AND WHAT ASSESTS ARE THEY NOT ALLOWED TO TOUCH?

29 Jan WHAT ASSETS IS THE IRS ALLOWED TO SEIZE TO PAY MY TAX DEBTS, AND WHAT ASSESTS ARE THEY NOT ALLOWED TO TOUCH?

The IRS is allowed to seize or levy essentially all assets owned by businesses or individuals. This includes wages and income from all sources, bank accounts, safety deposit boxes, IRA, SEP, Keogh, 401(k) accounts, autos, real estate, and personal belongings (i.e. artwork or collectibles) of particular value. For personal residences, a court order is required, but that, too, is permitted where levy action has been deemed appropriate (seizing a personal residence occurs rarely, but rental properties or vacant land are “fair game”).

There are some exemption allowances for the value of personal belongings (furniture, clothing, et al), and for tools of the trade for the self-employed (this allowance is only for individuals, not partnerships, LLCs, corporations), but it is essentially minor in amount.

Once the government has sent out the appropriate letter notices, levy action is allowed to commence.

 

The seizure of assets by the IRS must be avoided if at all possible. There are a number of ways to freeze a collection account and to discuss less intrusive collection alternatives other than levy action. To prevent a levy you may consider filing a Collection Due Process hearing request (CDP). Again – be proactive and timely rather than reactive when dealing with the IRS and your collection matters.

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