En esta noticia
The Internal Revenue Service (IRS) can indefinitely seize the retirement accounts of those who ignored their Final Notice of Intent to Levy, the procedure that marks the point of no return in the collection process. The levy on retirement funds —IRA, 401(k), pensions, SEP-IRA, and Thrift Savings Plan— remains in effect until the tax debt is fully paid off.
IRS Publication 594, updated in January 2026, confirms that this levy does not go away with the passage of time. The agency will only release it if the full debt is paid, a payment plan is approved, an Offer in Compromise is accepted, or it is shown that the seizure prevents the person from covering basic living expenses.
What the IRS Final Notice of Intent to Levy is and why it is crucial to act
The Final Notice of Intent to Levy is the last formal communication before the tax authority proceeds with the seizure of assets. The agency issues it only after having sent at least one initial bill and a second notice with no response or payment agreement.
This notice gives the taxpayer 30 days to act before the levy takes effect. Anyone who does not respond within that period loses the right to request a Collection Due Process Hearing —the main legal tool to stop the seizure— and enables the IRS to proceed immediately against any asset, including retirement funds.
Which retirement accounts can the IRS levy
The agency can seize, among others:
- 401(k) plans and qualified pensions under ERISA
- Traditional and Roth IRA accounts
- SEP-IRA and Keogh plans for self-employed workers
- Thrift Savings Plan (federal savings plan for government employees)
How to stop the levy on retirement benefits before the IRS carries out collection
Anyone who received the Final Notice of Intent to Levy still has options, but time is the critical factor. The IRS accepts three main ways to stop or reverse the process before retirement funds are seized.
Available options depending on the situation
- Installment agreement: allows the debt to be paid in periodic installments. It can be requested online at IRS.gov/plandepago if the combined debt does not exceed $50,000. Once approved, the IRS cannot issue new levies.
- Offer in Compromise (OIC): for those who cannot pay the full amount even in installments, it allows negotiating a lower amount. It requires a request fee and an initial payment, although low-income taxpayers may be exempt.
- Request for hardship deferral: if payment would prevent the person from covering basic living expenses, the IRS can temporarily suspend collection by marking the account as “currently not collectible”.
In all cases, interest and penalties continue to accrue during any deferral or payment plan. The sooner action is taken, the lower the final amount to be paid.