IRS Penalty Alert: The Month-Old Tax Mistake That Puts Your Pension at Risk

The Internal Revenue Service (IRS) details on its website for all tax-paying citizens and foreigners what the consequences may be of receiving a Notice of Seizure and Your Right to a Hearing and not responding within 30 days.

In these cases, the agency may determine that the seizure of assets is the next action to take, so it may take any property on which a lien has been imposed and part of the benefits in the form of retirement, as part of the collection process.

Tax.IRS confirms $12,000 benefits for married couples who meet this condition

abre en nueva pestaña

What happens if the IRS decides to seize pensions

When the IRS decides to enforce the measure and apply a garnishment on this type of benefit, through the Federal Payment Levy Program up to 15% of the payments can be withheld continuously, until the total debt is paid off.

This penalty may apply to certain Social Security benefits -such as retirement benefits-, but also to income from annuities from the federal retirement system of the Office of Personnel Management and to payments to federal contractors or vendors.

“We will impose the garnishment only once, not every time you are paid. The same garnishment remains in effect until your debt is fully resolved, other arrangements are made, the collection period ends, or the IRS releases the levy,” it states.

What other assets can the IRS seize

“They may take your wages, money from your bank or other financial account; or take and sell your vehicle(s), real estate, and other personal property,” the agency says.

In that sense, responding to collection notices as soon as possible and expressing an intention to pay off the debt is essential to prevent any asset from being taken on which a lien has been issued.

Attention.Official: IRS will seize all bank accounts, vehicles, and properties of those who make this mistake after receiving an inheritance

abre en nueva pestaña

In what situations can the IRS release pensions and assets

The penalty could become ineffective when any of the following situations occur

1. The debt was paid off
2. The period for collecting the tax expired before the levy was issued
3. Releasing the levy would allow you to pay the taxes
4. An installment payment plan was established and it was agreed to release the levy
5. The penalty could prevent the taxpayer from covering basic day-to-day expenses
6. The value of the property is greater than the amount owed

If the measure is lifted for any reason other than the first, it is essential to pay as soon as possible to avoid it being imposed again.