Tuesday, October 2, 2012

Can The Irs Take My Pension?

IRS Problems can cause you and your family a lot of stress. You have worked hard all your life to be able to have a nice home and car. Now the IRS is threatening to take this all away. You have received a notice from the IRS stating that they are going to seize your assets to pay off the back taxes you owe. Can they do this? Can they take your car, your home, even your pension?

The IRS can seize your assets to pay your tax bill but there are certain assets that are safe from the IRS.

1. Clothing and school books
2. Fuel, food, furniture and personal effects up to ,500
3. Tools and books that are job related up to ,250
4. Unemployment, worker's compensation, public assistance and job training benefits
5. Undelivered mail
6. Certain annuity and pension benefits which includes the Railroad Retirement Act, Railroad Unemployment Insurance Act, Special Pensions for Medal of Honor winners, and Retired Serviceman's Family Protection Plan and Survivor Benefit Plan
7. Certain service-oriented disability payments
8. Deposits to the special Treasury fund made by members of the armed forces and Public Health Service employees who are on permanent duty assigned outside the US
9. A minimum amount exempt from a levy on wages, salary, and other income

You will notice that on the above list it says "certain annuity and pension benefits." These benefits are not completely exempt from the IRS. Your pension may be at risk if you owe a large sum to the IRS.

The IRS will typically seize your assets in this order:

1. Bank and checking accounts
2. Cars, boats, airplanes, and other recreational vehicles
3. Cash value life insurance
4. Accounts receivable
5. Stocks and bonds
6. Wages
7. Collectibles
8. Investment and vacation real estate
9. Pensions, IRAs and Keoghs
10. Home

As you can see, pensions are low on the list.

When the IRS seizes assets, they only need enough to pay off your tax bill. Do not forget, however, that your bill has been accruing penalties and interest so it has been increasing daily. If there are no other assets available to satisfy your bill than the IRS can seize your pension.

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