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Types of Assets and Income the IRS May Levy

Types of Assets and Income the IRS May Levy

The IRS has the power to levy most types of assets and income. Only a few items are specifically exempt from IRS seizure, but the IRS seizes some types of assets more frequently than others.

Income Subject to IRS Levy

The IRS can seize your wages, salary, commission using a wage garnishment. The IRS only has to issue a single levy and can repeatedly take a portion of your wages from each paycheck.

The amount of income that can be seized is based on your filing status and number of exemptions claimed. 100% of any bonuses or commissions can be seized.

The IRS can also seize other types of income, such as dividends, payments on promissory notes, or payments to independent contractors. However, a new levy needs to be issued each time one of these payments are seized.

Social Security benefits and some other payments may be seized as part of the Federal Payment Levy Program. In some cases, only a portion of these payments can be levied.

The following types of income are exempt from IRS seizure:

  • Unemployment benefits
  • Certain annuity and pension benefits
  • Certain service-connected veterans’ disability benefits
  • Workers’ compensation
  • Some public assistance payments

Assets Subject to IRS Levy

Bank levies are among the most common types of IRS levies. The IRS can take all of the funds on your bank account up to the amount you owe in back taxes, penalties, and interest.

Other assets that can be seized include retirement accounts, houses, cars, or some other types of personal property. The IRS can only seize assets if they expect to receive net proceeds from the seizure, so property that has little value usually won’t be levied.

Certain assets are specifically exempt from IRS levy:

  • Necessary schoolbooks and clothing
  • Undelivered mail
  • Certain amounts of fuel, provisions, furniture, and household goods
  • Certain amounts of books and tools used in a trade or business

In practice, the IRS doesn’t levy assets such as a primary residence very often. However, if you fail to cooperate or try to evade collection, the IRS may use these strategies as a last resort.

Contact a tax resolution attorney to protect your assets and income from IRS seizure and resolve your tax problems.

The Gartzman Law Firm offers tax settlement help for both federal and state tax debt. Use our contact form to request a consultation with an Atlanta tax resolution attorney.