IRS assets exempt from IRS liens and levies

On Behalf of | Sep 4, 2015 | Back Taxes or Tax Debt

In previous blog posts we’ve discussed IRS tax levies and liens. To review, in cases where a taxpayer owes the IRS money, the agency can put a lien on a taxpayer’s property to ensure that any proceeds from the sale of the property can be seized by the IRS in an effort to repay back taxes. If the IRS imposes a tax levy, the agency can garnish assets held in bank accounts and from an individual’s wages to recoup unpaid tax debt.

Prior to either a lien or levy being imposed, the IRS will take steps to notify a taxpayer and provide opportunities for him or her to communicate with and attempt to rectify any outstanding tax debt issues via one of the sanctioned IRS repayment programs. When possible, the IRS will pursue imposing a property lien before taking action to impose any levy.

For individuals facing an IRS lien or levy, there are certain assets that are except from seizure that an individual is allowed to keep. These include basic clothing materials, personal items totaling up to a certain value, child support payments, worker’s compensation benefits, Social Security and welfare benefits, unemployment benefits and wages needed to pay for “basic living expenses.”

There are various circumstances that may result in an individual accruing tax debt. An attorney who handles tax matters can assist individuals who are facing IRS liens or levies resolve tax disputes and debt issues. An attorney can also assist in cases where an individual disputes that he or she owes back taxes.

Source: Investopedia, “IRS Asset Seizures: Could It Happen To You?” 

Cornell University Law School, “26 U.S. Code § 6334 – Property exempt from levy