answersLogoWhite

0

  • Credit and Debit Cards
  • Home Equity and Refinancing
  • Taxes and Tax Preparation
  • Debt Collection

What kind of assets are protected from creditors and the IRS?


Top Answer
User Avatar
Wiki User
Answered 2006-07-24 12:28:25

Property and assets that are exempt from creditor attachment or seizure are determined by the state law in which the debtor resides. Several states such as Florida and Texas have unlimited protection of homesteads while in others the protection depends upon factors such as marital property with a single debtor, disabled and so forth. Generally these exemptions will be the same as those allowed in bankruptcy with additional non bankruptcy federal exemptions possibly being applicable. Personal property and income exemptions vary greatly from state to state. All Social Security, RRB, disability benefits, government pensions, public assistance and most private pensions are exempt from garnishment or seizure by creditors under both state and federal law. However, in almost every state bank accounts are subject to levy regardless if they are joint or separately held. Therefore persons should not mix exempt funds with non exempt funds to prevent a bank account from being "frozen" for evaluation by the court. There very little real or personal property that is exempt from IRS attachment, seizure or forced sale. The very rare exception is marital property held by Tenancy By The Entirety when only one spouse owes tax arrearages, and even that is not a sure thing. The IRS can literally take whatever steps necessary to recover taxes owed without due process of law. It is a misconception that the IRS cannot garnish SS and other such benefits. The maximum garnishment for such is 15% with the first $750 being exempt. For standard income 25% garnishment applies with the possibility of a higher or reduced percentage depending upon the circumstances.

012
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
๐Ÿ˜‚
0
User Avatar

Your Answer

Loading...

Still have questions?

Related Questions

What happens if you default and the majority of what you owe is to the IRS?

The IRS acts like any other creditor only with more power. If you go into bankruptcy, your assets, except for those that are protected are sold and your creditors, including the IRS, get the money. After that, if bankruptcy wipes your record clean, that includes the IRS. There may be other considerations. You will need to discuss the options with your lawyer.


When a person dies owing the IRS a lot of money are their children responsible for the debt?

The estate is responsible for he debts of the decedent. If the decedent was the sole owner of any assets at the time of death those assets must be used to pay the debts before any property can be distributed to the heirs. If there are no assets the creditors are out of luck.


Can the IRS garnish my social security and veterans disability checks?

No, creditors, including the IRS cannot garnish government benefits.


When does the IRS accept an offer in compromise?

The IRS accepts an offer in compromise when the amount offered is the most the IRS can expect to receive in payment. The IRS will consider a persons income, ability to pay, assets and expenses.


If a person has an IRS lien against them are they considered a convicted felon?

NO. A lien is nothing more than a public record that notifies other creditors that the IRS has a security interest against the Taxpayer's assets. The IRS can file a lien without ANY judicial review. And it's a civil matter, not criminal. It is similar to having your credit card company file a judgment against you for not paying (except they at least have to go to court to get a judgment).


If your home is in a living trust is it protected form creditors and the IRS?

If the trust is properly drafted the property can be removed from your estate entirely. However, the trust must be drafted by an expert in trust law. If the grantor retains any power over the trust property, it will be vulnerable to creditors and taxation. You need to consult with an attorney with a great reputation who is an expert in trust law. She/he can review your situation, your needs and explain your options.


Can the IRS take money owed from a savings account?

Typically they can seize liquid assets if there are taxes owed.


Can we ship her effects home with no problems from the IRS or CA gov and can we ignore creditors or does the estate need an administrator and if so should we avoid serving bc of liabilities?

Yes, you need to establish an estate. If there are assets in the estate, you will have to resolve the bills owed. If you do not wish to serve as administrator, you can pay a bank or lawyer to do the work.


Can short term disability by garnished?

Yes, by the federal government only. The IRS, federal student loans, ect. Regular creditors can not.


Can IRS take car mom left you to collect her debt?

Yes, the IRS can do that. The car is part of the estate. The assets of the estate have to be used to clear all debts before anything can be distributed.


What offshore accounts do use to hide your assets?

When you say "hide" the question is from whom? If you're in the US, you're supposed to report any and all income on your IRS tax forms. But, if you don't, in some cases it's harder for the IRS to find that you had those assets in order for them to catch you. Switzerland has been popular for this, because they don't follow extradition and discovery orders from non-swiss authorities. There are also legal ways to "hide" assets -- there are a number of legitimate tax-free zones, such as the Cayman Islands (as in the novel, The Firm), Bermuda, Antigua etc where legally these countries have tax treaties with the UK and the US to be income tax free. In other circumstances, people are trying to hide assets from creditors or even family and spouses.


Can the IRS seize a beneficiary's death benefit for tax arrearages owed by the deceased?

No, death benefits from a life insurance policy which has a named beneficiary is not subject to attachment by the IRS, state tax officials, judgment creditors, etc.


Can a 1099C be issued for an amount that was forgiven?

AnswerWhen creditors cancel or "forgive" a debt they must send the debtor a 1099-C and also report it to the IRS. The IRS may consider the amount of the cancelled income taxable. Consult a tax professional.


Do you send in a 1098 form to IRS?

This is kind of a vague question. If you are required to fill out IRS Form 1098, then you send it in. You can paper file or electronically file your data with the IRS.


Can the IRS take your back pay winnings after you win your SSDI hearing?

Quite simply, yes. The IRS can take nearly any income or assets from you when you owe money. A tax attorney can sometimes get limits placed on them.


What if a dependent fails to pay taxes?

You are not responsible for the taxes of your dependents unless you control their assets or you were somehow involved in a plan to prevent them from paying their taxes.The IRS will penalize the dependent and/or go after the dependent's assets to collect taxes.


What Happens to the permanently restricted net assets when a not for profit organization ceases to exist?

The assets are distributed in accordance with the defunct organization's "Dissolution" clause in its bylaws. In the U. S., the assets need to be distributed to another organization that is registered as an IRS Code 501(c)(xx) entity.


If you are a joint tenant with right to survivorship can the IRS come after your joint asset?

Yes. While both tenants are living the interest of either is vulnerable to their respective creditors.


Could the IRS levy personal bank accounts once they have a lien on the house Could the IRS put locks on the door without notice Does the IRS take into consideration the age of the owners?

The IRS has the right to put a lien on any property/assets where a taxpayer has liability (owes the IRS). Its a safe bet to say that if you owe the IRS, you have a lien placed on your property, but not in all cases. If you are placed in a resolution called Currently Not Collectible, the IRS will automatically file a lien. So to answer you question, the IRS can both place a lien on the house and issue a levy simultanously. No the IRS will not take into consideration the age of the individual owing the tax debt.


In Georgia if I marry a man that owes the IRS money can I be liable?

No. Georgia is not a community property state, therefore you cannot be held liable. However, any assets that you hold jointly with your husband may be subject to IRS enforcement actions.


What about your car or airplane can you keep if filing bankruptcy for IRS debt?

You can't file bankruptcy "for IRS debt." You have to list all your debts and assets, and you can keep what you can exempt under state or federal laws. If you have little or no equity in an asset, you should have no problem.


Why does the IRS have accelerated cost recovery for taxpayers?

As an incentive to encourage taxpayers to purchase more assets during the year and help speed up the economy.


Where do you mail form 1120s?

Where do you mail form 1120 to the irs? Depends on where the corporation's principal business, office, or agency is located and the corporation's total assets at the end of the tax year. The best place to find this information is the IRS website. See link below: http://www.irs.gov/pub/irs-pdf/i1120.pdf


Can you find a person's place of current employment with a social security number?

This is illegal unless it is to do with creditors, etc.! * No. Social Security numbers/records, are protected by US federal law. Creditors and other persons have access to SS numbers because the individual supplies them at the time of application. The creditor does not have access to the individuals employment history through the SSA nor do private individuals. Certain exceptions are made for governmental agencies (IRS, USCIS, etc.) and for standing orders of child support being enforced by a state or federal agency.


What if your mother past away and owes lot to the IRS her father is still alive when he passes away and she on the will but her son is the only survivor does the IRS goes after what the son gets?

Typically, the right to inherit or take under a Will lapses when the person passes away. So, no, the IRS would not have a right to collect from the father's assets which pass to the mother's son.