When you get an IRS Levy Notice you should be aware. When a tax debtor is unable to meet his or her federal tax obligations, one of the remedies that the Internal Revenue Service (IRS) has at its disposal is the ability to levy on the assets of the debtor in order to satisfy that tax obligation. However, despite the general rule that all property and property rights that belong to the tax debtor may be levied upon for payment of outstanding tax obligations, the law provides that certain property is exempt from an IRS levy. Internal Revenue Service IRS Levy
Internal Revenue Code (IRC) § 6334 governs what property is exempt from an IRS levy Notice. Those exempted items include:
1. Wearing apparel and schoolbooks necessary for the taxpayer or his or her family members
2. Fuel, provisions, furniture, and personal effects not to exceed $8,570 in value
3. Books and trade, business, or professional tools not to exceed $4,290 in value
4. Unemployment benefits
5. Undelivered mail addressed to any person
6. Certain annuity and pension payments
7. Workmen’s compensation
8. Judgments granting child support for minor children
9. Minimum exemption for wages, salary, and other income
10. Certain service-connected disability payments
11. Certain public assistance payments
12. Assistance under Job Training Partnership Act
13. Residences exempt in small deficiency cases and principal residences and certain business assets exempt in absence of certain approval or jeopardy
The maximum aggregate amounts listed above, such as the aggregate amounts for fuel, provisions and furniture, and the aggregate amounts of books and trade, business, or professional tools, are subject to change on a yearly basis. Thus, while it is useful to understand more generally what property is exempt from an IRS levy, a more detailed understanding of exactly what assets are exempt may necessitate the assistance of a licensed tax attorney. Furthermore, while it is useful to understand what property is and is not subject to an IRS levy, a quick review of the list provided above should not be a reason to ignore IRS demand letters and avoid cooperating with the IRS. Rather, it is designed to explain the taxpayer’s rights in relation to the IRS, and can help a tax debtor understand whether he or she has been presented with a legal issue worthy of further consideration by an experienced tax professional.
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Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.
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