Are There Assets the IRS Cannot Seize?

Chad Silver

Chad Silver

Managing Partner of Silver Tax Group, author of the book "Stop the IRS". Practicing a variety of tax issues, regulations, laws and rights. Specializing exclusively on tax matters involving IRS audits, negotiation, settlements & compromises.

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The Internal Revenue Service has broad authority when it comes to their collection efforts. When seeking the repayment of tax debt, the IRS will often turn to asset seizure. In these situations, however, there are certain procedures that must be followed and numerous rules that must be adhered to.

In general, the seizing of assets is one of the most powerful collection tools the IRS has at its disposal. Whether the seizure is centered on cash assets such as a bank account or property such as a car that can be sold toward debt recovery, the IRS must follow a strict path before taking this collection action.

Typically, asset seizure is the final stage of the debt recovery process. Individuals might be able to negotiate an offer in compromise or dispute the underlying tax liability. Failing that, the IRS will follow their general policy of seizing assets as a last resort. The IRS can attempt to seize wages, bank account balances, retirement accounts, Social Security benefits or physical property such as your house or car.

What is exempt?

However, the IRS will generally consider various sources of income exempt from seizure. These can include unemployment benefits, workers’ compensation benefits and income from child support payments. Additionally, certain factors can make annuity, pension, veteran disability and public assistance benefits off limits to IRS seizure.

How can I protect myself?

In any legal situation – especially those that might directly impact your future financial stability – it is crucial that you fully understand your rights as well as the possible consequences you face. A tax law professional can carefully examine your situation and provide the legal guidance you need to successfully navigate your IRS tax matter.

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