The IRS levy is one of the most dreaded actions of the IRS. This legal seizure is meant to satisfy your tax debts. It can take many forms — and this versatility makes it difficult to understand. To help, we’ve gone back to basics with a detailed breakdown below:
What Can the IRS Seize?
While levies typically represent a last resort for the IRS, the agency holds broad powers to seize your assets if doing so is deemed absolutely necessary. The top types of seizures include:
- Wage garnishment
- Money from bank accounts
- Real estate
- Retirement accounts
Is Anything Safe?
Few assets are safe when the IRS relies on levies to satisfy tax debts. While the agency will typically seek alternate arrangements before garnishing your wages or selling your vehicles, most of your assets and income are subject to levy activity. A few exceptions exist, however:
- Child support. Strict limitations should technically prevent the IRS from seizing the majority of child support payments. However, if these have been deposited in a bank account, they could potentially be seized.
- Assets not owned at the time of enforcement. The IRS cannot seize anything that was gifted after the agency issued a levy.
- Social Security benefits. This is where things get complicated. Social Security benefits are typically exempt and definitely the last source the IRS will seek, but the Federal Payment Levy Program makes it possible to levy up to 15 percent of these benefits. So, yes, Social Security funds are somewhat safe — but not entirely.
Are you at risk of suffering an IRS levy? It’s time to take action. While it’s possible for the IRS to seize several types of assets, this will nearly always be avoided if you (or a representative) seek an alternate resolution. Our team at the Highland Tax Group can help safeguard your assets, so don’t hesitate to get in touch.