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New Member
posted Jun 1, 2019 6:25:17 AM

Will the irs take your ira for past due taxes

If I have an IRA will the IRS take it to cover back taxes owed?

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1 Best answer
Level 15
Jun 1, 2019 6:25:19 AM

An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, take money in your bank or other financial account, seize and sell your vehicle(s), real estate and other personal property.  

Retirement accounts, including IRAs, are not exempt from an IRS levy. Though state laws protect them from creditors, these laws do not apply to IRS agents. As long as the taxpayer can access his IRA and remove funds from it, the IRS is allowed to levy it.


https://www.irs.gov/businesses/small-businesses-self-employed/levy

3 Replies
Level 15
Jun 1, 2019 6:25:19 AM

An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, take money in your bank or other financial account, seize and sell your vehicle(s), real estate and other personal property.  

Retirement accounts, including IRAs, are not exempt from an IRS levy. Though state laws protect them from creditors, these laws do not apply to IRS agents. As long as the taxpayer can access his IRA and remove funds from it, the IRS is allowed to levy it.


https://www.irs.gov/businesses/small-businesses-self-employed/levy

New Member
May 26, 2021 4:15:39 AM

But if the IRS seizes an inherited IRA holding only stock, to pay back taxes, can the IRS convert the stock to cash, and does the heir-taxpayer owe taxes on the converted amount?  And penalties for early withdrawal?

Level 15
May 26, 2021 4:02:04 PM

If the IRS forces you to liquidate the IRA to pay taxes it is a taxable distribution  and must be reported on your tax return however it is NOT subject to the 10% penalty ... how decent of them.