As financial pressures grow in the United States of America, citizens are worried about missing payments and then being the victim of a tax levy, where the IRS can actually repossess some of your assets.
However, many aren't exactly clear on just what the IRS are allowed to take from you.
If you own back taxes then the IRS are legally allowed to seek payment of the debt in the form of asset repossession.
Any property that adds up to the equivalent value of your tax debt is allowed to be taken, although there are some exceptions.
What assets are the IRS not allowed to take?
Once repeated warnings have been ignored, or fail to produce a repayment of back taxes owed to the state, the IRS will impose a tax levy on any real estate the person owns.
This is intended to prevent you from selling your property before the tax debt is paid in full.
Assets are taken and then sold at a public auction before the person has a chance to reclaim them, provided their debt isn't then paid.
Assets that are considered essential to your survival and shelter are exempt from being taken.
A list of items that can't be taken has actually been published, and it includes:
- Clothing and schoolbooks
- Work tools valued at or below 3,520 dollars
- Person effects that don't exceed 6,250 dollars in value
- Furniture valued at or below 7,720 dollars
- Any asset with no equitable value
- Your personal residence if you owe less than 5,000 dollars
What is the IRS allowed to take?
When the subject of a tax levy, the following items are seen as acceptable for the IRS to take:
- Motor vehicles
- Vacation homes
- Expensive jewelry
- Life insurance policies
- Savings accounts and retirement accounts
