What property is the IRS most likely to levy?
If you owe money to the IRS, chances are you have justifiable concerns over the IRS involuntarily taking your property to pay the debt.
But the IRS releases statistics on what they levy and seize. This provides valuable direction as to what is really at risk for you rather than losing sleep and energy worrying over what might could happen.
The IRS prefers assets that are liquid – meaning easily convertible to cash. This is primarily bank accounts and wages. And although retirement accounts are cash assets, the IRS tends to avoid that. The IRS shies away from seizing real and personal property – houses, cars, household goods, even business equipment.
Here are the facts as to what the IRS levies and seizes:
In 2011, the IRS made 776 seizures of real and personal property – hard assets that take time to liquidate, houses, cars, household goods, business equipment.
Compare that to levies on bank accounts, wages, etc.: In 2011, the IRS issued 3,748,884 levies on third parties, like banks and employers.
Think about it: 776 vs. almost 4 million.
The IRS wants to get paid in the least intrusive manner and with the quickest result. There are reasons for this wide discrepancy, including a prohibition in the Internal Revenue Code and Internal Revenue Manual on the IRS seizing and selling property that will not result in any net recovery (i.e., property with no equity). Make no mistake that an IRS seizure of a house or business equipment is serious; but it is important to understand that the risk usually is in cash assets.
If you have a wage levy or just found out the money in your bank account was just cleaned-out by the IRS, there are ways to get quick releases. Sometimes, a levy can be released without providing the IRS any financial information about you (known as streamlined installment agreements), while other times your income and expenses will need to be discussed with the IRS to arrive at a plan (which can include the levy released on a finding of financial hardship and having your account placed on hold for several years). In extreme situations, bankruptcy can get an IRS levy released, no questions asked.
