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Protect your Assets and your Personal Property from an IRS Levy.
Learn how to guard your assets against an IRS levy.
There are several methods you can employ to avoid having the IRS seize your assets. The methods you can employ to prevent an IRS seizure of assets include:
- Turn over legal ownership of assets ( i.e. sign over your home to a spouse or family member.
- Do not let the IRS be aware of certain assets.
- Display to the IRS that it is not financially sound to seize your assets.
Provided below is information on common procedures to protect certain assets from an IRS seizure. It is important to note that there is a thin line between the legitimacy of these methods, as some of them might not be legal. Before attempting any of these methods, it is advisable to speak directly with a tax professional or tax attorney for more information.
Transfer your ownership of assets to someone else.
To stop the IRS from seizing assets, you can transfer ownership of those assets to another individual. If you are currently looking into the option of asset transferring, you need to do so before you receive an email or letter notifying you of the IRS’ intent to levy.
Assets transferred after receiving the intent to levy notice can be sized by the IRS legally. However, this does not always work because even if you transfer assets before the IRS sends you a notice about the intent to levy, they still have the ability to seize those assets. This is because the IRS will recognize the individual you transferred the assets to as a trustworthy nominee and will go after the seizure of that item.
However, this process of asset transferring does slow down the ability of the IRS to seize assets and gives you a little more time to try to create a settlement agreement before they release the levy.
Get the IRS to exempt specific assets
The IRS will not go after the seizure of assets that you can successfully prove is not worth it to seize. This item then becomes exempt. To get the item to become exempt, you must prove that the total effort needed to sell that asset is going to cost a greater amount than what the asset would fetch on the market.
Individuals are also able to get an asset exempted if they can prove that this asset will impede you from going to work. The IRS will always attempt to seize assets like tractors, trucks, and cars. However, they might be necessary for your job and without which, it will greatly hamper your ability to earn money. You need to demonstrate to the IRS collector that the asset is necessary to make money and get it exempted from seizure.
Move your financial accounts to locations the IRS is unacquainted with
The IRS is only privy to financial accounts that have received interest, as well as ones where you had been required to fill out and file a 1099 form. If you choose to transfer the assets from that account with the filed 1099 form, it makes it a lot more complicated for the IRS to locate those assets.
Do not inform the IRS about every asset owned
This method can, however, be very risky. If the IRS does not inquire about a certain asset, you are not necessitated to divulge that information about the asset and its location to them. It goes without saying then if the IRS does not know about it, they cannot take it. You need to be very cautious though because it is actually illegal to withhold information from the IRS about any assets you own. You are required to disclose all necessary information. The IRS will go through all public records to see what assets you owe. When the IRS starts to discuss your assets and pose questions, you should first consult a tax professional.
If you do have assets the IRS is unaware of and you would like to keep them from being aware of those assets, keep those items hidden. Do not have them in the vicinity of your property as it will make it easy for the IRS to locate them.