Can the IRS take my 401(k)?

Yes. The IRS deploys sophisticated and powerful collection weapons to seize assets and lien property. And they can, and do, seize 401(k)s. In order to defend against IRS collection, it is important to understand the following:

  1. Before the IRS can go after your assets, you will be given the option of paying your tax debt.
  2. The IRS will likely first place a federal tax lien on your 401(k). The federal tax lien puts the world on notice that you owe the IRS.
  3. Next, the IRS will issue a notice of intent to levy your wages or bank account.
  4. After the notice of intent to levy is issued, the IRS will issue a notice of levy on the 401(k) plan.
  5. If the IRS places a notice of intent to levy on your account, it is vital you take action or you risk losing your retirement. The good news is you have options to deal with the tax, so don’t wait.

If you are the target of the IRS, the most important step you can take is to immediately get the advice of an experienced, tough, clever tax lawyer. Attempting to go solo without legal guidance puts you at a substantial disadvantage. And getting the wrong advice can make it even worse.

You may gain a better understanding by calling us for a free tax defense analysis or obtaining the Faith Firm free book The Truth about Tax Settlement and Alternative Tax Solutions.