The IRS has the power to seize many types of property, but certain items are exempt from levy. No matter how much you owe or how long your taxes have gone unpaid, the IRS isn’t legally permitted to take these types of property.
Assets Exempt from IRS Levy
The following assets can’t be levied:
- Unemployment payments
- Certain annuity and pension benefits
- Certain service-connected disability benefits for veterans
- Worker’s compensation payments
- Certain public assistance payments
- Assistance under the Job Training Partnership Act
- Income for court-ordered child support payments
- Necessary schoolbooks and clothing
- Certain amounts of books and tools of the trade
Minimum Weekly Exempt Income
A certain amount of your income is also exempt from the levy. The IRS will never take 100% of your paycheck because you are entitled to a minimum weekly amount by law.
However, don’t expect to get too far off of your exempt income. A single person with no dependents is only permitted to receive $1,016.67 per month. All of the rest of your income, including any bonuses or commissions, can be levied by the IRS.
Other Limitations on Levies
The IRS won’t levy an asset if it won’t result in net proceeds after the costs of the levy are paid. Assets such as primary residences and retirement accounts may be levied, but are generally only seized after the IRS has tried other collection methods and the taxpayer has been uncooperative.
You may also be able to stop a levy if it is causing an immediate economic hardship. However, you will need to contact the IRS or request a Collection Due Process hearing to assert this right.
Other situations can result in temporary relief from IRS levies. If your account is Currently Not Collectible, you are in bankruptcy, or you have a pending request (installment agreement, Offer in Compromise, etc.), the IRS will generally not levy your assets during these time periods.
You’ll also be protected from most types of levies if you negotiate an installment agreement or another type of tax resolution and follow the terms of your agreement. If you want to stop worrying about IRS levies, contact a tax attorney to discuss your tax resolution options.
The Gartzman Law Firm can help you with levies and other IRS tax problems. Use our contact form to request a consultation with an Atlanta tax resolution attorney.