An IRS wage levy does not have to result in the loss of all of your paycheck. The Internal Revenue Code has exemptions that can protect your earnings from an IRS levy. These “exemptions” are listed in Section 6334 of the tax code, appropriately titled “Property Exempt from Levy.” Think of exemptions as protections [...]
Property Exempt from Collection
My clients with IRS collection problem come to me with different ideas about what will happen to them because they did not pay their taxes. Is the IRS going to show up one day and seize my house? Levy on my income so I cannot provide for my family? Shut down my business? When do [...]
I received a great question from a reader about whether Veteran’s disability benefits should be included in the value of an IRS installment agreement or offer in compromise. Although the question is directed to Veterans’ disability benefits, my answer also applies to those with unemployment and workers’ compensation benefits. Here is the question: I owe the IRS [...]
A reader asks the following regarding IRS levies on social security benefits: What is the difference between an automated federal levy on social security and a manual tax levy, and why does the IRS choose one over the other? Here is my response: 1. Automated Levy (15%). Pursuant to section 6331(h) of the [...]
Retirement accounts are considered to be an investment that is protected from creditors. But here is an interesting question from a reader about a big exception to that rule (yes, it is the IRS): Several years ago, I liquidated all of my retirement money to pay for gambling trips to the casinos. My husband and [...]
Here are the final five situations to look for when the IRS cannot take collection action: When the value of the property is protected by exemptions provided by Section 6334 of the Internal Revenue Code. There is certain property that the IRS cannot take under any circumstance, including your furniture and household goods valued up [...]
