Subscribe RSS FeedWhen most people think about IRS garnishment they typically think about their wages being levied. Unfortunately, that’s only one of many things the IRS can garnish. Basically, they can levy just about any income or financial account or attach a lien to any physical or real property that they want to. Nothing you have is safe from the IRS unless you know how to protect yourself.
Most people are familiar with the fact that the government can garnish wages or salaries. A notice is sent to your employer and money is taken directly out of your paycheck. But that’s not the only way that the IRS can get your money. They can also take your commissions and, if you have a business, your accounts receivable. In addition to that, if you have rental property they can levy your rental income. The interest and dividends you might receive from bank accounts or brokerage accounts can be garnished too. In fact, just about any stream of income you have coming in can be levied.
But they might take more than just the interest and dividends.
The IRS can take your bank accounts, brokerage accounts, and even the cash loan value of your life insurance if it wants to. And, by the way, that includes your retirement accounts. No financial account is safe.
Retirees aren’t safe from IRS garnishment either. As mentioned above, interest and dividends can be garnished, and even the accounts themselves can be confiscated. But that’s not all. Annuities and interest from pensions can be levied and entire retirement accounts can be seized. Even Social Security and Disability Insurance Benefits can be levied by up to 15%.
Physical and real property can be taken too. The IRS can put a lien, which is a legal claim, on physical property and real estate. This includes cars, boats, and even your house. Once a tax lien is put on your home you have to satisfy the lien before you can sell or even refinance. The levy can also affect your credit rating and make it difficult for you to get credit in the future.
Though all of this sounds scary, there are things you can do to prevent any of these catastrophes from happening to you and your family. Be sure to act at once if the IRS sends you a notice of any kind. Don’t wait for the second notice and don’t just hope the problem will go away. It won’t. Normally you can reach an agreement with the government if you act swiftly. And don’t do it alone. Get professional advice to help you negotiate the best possible settlement with the IRS to protect your income and your assets from IRS garnishment.
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