Any time a taxpayer owes money to the IRS, the fear may exist that the government is going to take all of the taxpayer’s assets. Taxpayers dealing with the IRS or its Revenue Officers may face threats and pressure that impose a great deal of stress. Fortunately, however, even the IRS is subject to limitations when it comes to its ability to levy assets. It is important for taxpayers to understand these limitations in order to protect their legal rights.
9 Limitations on the IRS’s Ability to Levy Your Assets
Certain assets are protected from IRS levies and, if you are involved in some form of resolution of your debt, all assets may be protected. The following are some of the exemptions from IRS levies:
- If you are in an installment agreement, the IRS cannot levy you. This includes the time during which the payment plan is pending, as well as during an appeal of a rejected or terminated installment agreement.
- If there is no equity in your property, such as a car or a home, the IRS cannot seize it.
- Once you file an offer in compromise, the IRS cannot levy or seize your assets while the offer is pending. Similarly, the assets cannot be levied or seized during an appeal of a rejected offer in compromise.
- Certain assets simply cannot be seized by the IRS. This includes your clothing, household goods, and certain business tools and equipment.
- Before taking your house, the IRS has to jump through certain hoops. First, the government must sue you in court and receive a judge’s approval to take the property. During this process, you are entitled to a copy of the lawsuit filing as well as an opportunity to be heard by a judge. Not all IRS Revenue Officers will explain this fact to unsuspecting taxpayers.
- Your assets cannot be collected while an innocent spouse claim is pending.
- If you have a collection decision under appeal, the IRS cannot levy your assets while the appeal is pending.
- If you are in the midst of a bankruptcy, the IRS cannot take your assets. IRS collection efforts are put on hold, preventing the IRS from seizing and levying assets.
- Before the IRS can levy your assets, you must be given 30 days advance notice.
When you are facing issues with the IRS, we can help. We have assisted many other taxpayers in resolving their tax problems. Learn more about their experiences by checking out our client testimonials today.