Protect Assets and Personal Property from IRS Levy
How To Protect Your Assets From The IRS
Depending on what assets you have, there are several ways to avoid having those assets seized by the IRS. The best ways to prevent seizure of assets is to not legally own the assets anymore, don’t let the IRS know about the assets, or show the IRS that it is not financially worth it to them to seize certain assets. The following are common ways to protecting some of your assets from IRS seizure. Please note that there may be a fine line between the legality of these items and it is best to consult a tax attorney or tax professional when dealing with these issues.
Transfer Ownership of Your Assets
A transfer of ownership can prevent the IRS from seizing the assets. If you plan on giving away or transferring assets, you must make sure it be done before you actually receive the intent to levy because if the assets are transferred after the notice is received the IRS can legally seize them. Even if the assets are transferred before the IRS files the intent to levy, they may still be able to go after them because the IRS recognizes it that you have made this person, corporation, or trust the nominee for the asset and they will still be able to pursue the item. Note, this process will slow the IRS down from taking assets and can buy you some extra time to set up an agreement with the IRS to release the levy.
If you can prove to the IRS that the asset they are trying to seize would not be worth it for them to seize then the item can be claimed as exempt and the IRS will no longer go after it. Typically, you will have to prove that the effort it would take to sell the asset would actually cost more than the asset would eventually sell for. You can also get an asset to be claimed as exempt if you are able to show that the asset will prevent you from working. Many times the IRS may try to seize assets such as cars, trucks, tractors, etc, that may be required for you to do your job and earn money. If you can show the IRS collector that this asset is required for you to earn money, it is likely that you can get an exemption on that asset.
Move Your Financial Accounts to Places the IRS Doesn’t Know You Have Money
The IRS only knows about the financial accounts that you have earned interest on and were required to file a Form 1099. If you move the assets out of the account that you have filed the 1099 from, this makes it much more difficult for the IRS to find those items.
Don’t Tell the IRS About Your Assets
You must be careful when using this method. You are not required to tell the IRS about all of your assets and the location of them if they do not ask. If they do not know about the asset, then they will not seize it. It is against the law to lie to the IRS about assets, though. Keep in mind that the IRS will search through public records and try to find any assets that they know you have. When the IRS begins asking questions about assets owned, it is a good idea to speak to a tax professional first. If there are assets that the IRS may not know about and you don’t want them to know about, you should try to keep the items out of view by not keeping them on your immediate property so it makes it harder for the IRS to discover these assets.
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