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Can the IRS levy or garnish the money in your 401(k) Retirement Account?
That depends on your retirement plan’s rules and regulations regarding your access to your retirement account and each taxpayer’s situation. Generally, according to Internal Revenue Manual (IRM) 22.214.171.124 and Internal Revenue Code (IRC) Section 6334, the IRS can access the following funds if the taxpayer can:
When a Levy is issued the IRS sends a form (IRS Form 668(A) Notice of Levy) to the administrator of the taxpayer’s retirement account. It instructs the administrator to seize funds from the taxpayer’s retirement account to fulfill the tax liability their employee owes to the IRS.
The IRS Cannot have access to a taxpayer account if:
- If a taxpayer’s retirement account does not allow access to the funds in. their employer-sponsored retirement account.
- They have a vested interest in the funds within your retirement account.
- Taxpayer separated service from your employer.
- Until the taxpayer is retired, disabled, or has died before retiring.
The IRS may not be able to levy a taxpayer’s retirement even if they access their retirement to:
- Pay for some or all of their necessities of life due to being retired or disabled or otherwise having lost a means of support.
- Pay for ongoing medical care due to a chronic medical condition such that their retirement account can be classified as an income source rather than as an asset.
How to get help if IRS garnished 401k accounts?
Is your 401(k) or SEP IRA or Keogh or IRA safe from IRS seizure? Coast One Tax Group’s team of resolution specialists – attorneys, accountants, and Enrolled Agents work to obtain the best tax resolution for every client.
Call us today at 18009010885 or schedule a free consultation with our tax experts to get started protecting your retirement from an IRS seizure.