If you owe back taxes to the IRS and have not made payment arrangements, they will levy your property, including your retirement benefits. If the IRS is about to levy your pension, 401(k), IRA, or Social Security benefits, you need assistance with your tax debt from the professionals at East Coast Tax Consulting Group.
If you have a fixed and determinable right to retirement benefits, an IRS tax levy can attach to payments you will receive in the future, even if you have not started to receive payments when the IRS issues the levy. Future income is considered fixed and determinable if it is not contingent upon the performance of future services. If a levy is served while you are receiving retirement payments, it applies to those payments as well as future payments.
Many taxpayers owing IRS back taxes have heard that there is a ten-year statute of limitations on collections. This means that once the ten-year period has expired the IRS can no longer collect your unpaid taxes. However, if the IRS issues a levy on your future rights to retirement income in which you have a fixed and determinable benefit within the allowed collection period, the levy continues to be effective for retirement benefits received after the collection statute expiration date. The levy will remain in effect until your back taxes are paid in full. It is IRS policy to limit the levy on Social Security benefits to 15%.
To avoid the continuous levy on your retirement income, it is important to consult a qualified CPA or tax attorney like those at East Coast Tax Consulting Group. We can help you resolve your IRS back taxes today.