How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask jgordosea Your Own Question

jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3039
Experience:  I've prepared all types of taxes since 1987.
3653323
Type Your Tax Question Here...
jgordosea is online now
A new question is answered every 9 seconds

I understand that 401(K) plans are protected from the claims

Resolved Question:

I understand that 401(K) plans are protected from the claims of creditors. My question is how about IRAs? It's state dependent, but if the IRS is after you, can the federal government take money out of an IRA no matter what state you live in?
Submitted: 1 year ago.
Category: Tax
Expert:  jgordosea replied 1 year ago.

Greetings,

 

Indeed the Internal Revenue Service can access for levy an Individual Retirement Account regardless of what state you live in.

 

It is even possible that the retirement accounts can be levied, despite what you have been told about protection from creditors.

See http://www.irs.gov/irm/part5/irm_05-011-006.html#d0e254 for the IRS manual on the procedures to levy such accounts.

 

"These instructions cover money accumulated in a pension or retirement plan, as well as Individual Retirement Arrangements (IRAs). They do not deal with levying retirement income. See section IRM 5.11.6.1 above. Also see Delegation Order 5-3 (Rev-1) at IRM 1.2.44.4(23)c.

 

There are many employer and self-sponsored retirement vehicles that are not exempt from levy. These plans include, for example:

  • Qualified Pension, Profit Sharing, and Stock Bonus Plans under ERISA

  • IRAs

  • Retirement Plans for the Self-Employed (such as SEP-IRAs and Keogh Plans)"

Even though most creditors may not be able to collect against retirement accounts, the IRS can levy on those accounts in many cases (though other assets, if available will first be accessed).

 

Please ask if you need more discussion or clarification.

Thank you.

 

Customer: replied 1 year ago.

Thank you. How about claims of non-government creditors? 401(K) and TSP retirement plans are shielded against any non-government creditors correct?


 


How about IRA/ROTH IRA in the state of California? Are you aware if non-government creditors can go after those type of retirement vehicles in a lawsuit? Thank you.

Expert:  jgordosea replied 1 year ago.

Hello again,

 

For the complete answer to those questions we would probably need a local lawyer since, as you said, that depends on state law.

 

Also, from my layman understanding not all creditors are always treated the same (for example for child support).

Generally there are amounts needed for personal and family support that are exempted and can not be taken, as well.

 

One source of information is at http://www.nolo.com/legal-encyclopedia/are-my-retirement-accounts-protected-from-judgment-creditors-california.html

 

"Federal law prohibits judgment creditors from going after money in a pension plan that was set up under the Employee Retirement Income Security Act (ERISA). To be protected against creditors, your ERISA account must be either a qualified retirement plan or an employee welfare benefit plan covered by ERISA.

Examples of ERISA-qualified pension plans and benefit plans covered by ERISA include:

  • 401(K) accounts

  • pension and profit-sharing plans

  • group health and life insurance plans

  • dental and vision plans, and

  • HRAs, HSAs, and accidental death or disability benefits.

There are circumstances when a judgment creditor may be able to get to your ERISA account, such as for a domestic relation order for spousal or child support (called a "QDRO"), or an IRS tax garnishment."

 

So, yes, there is federal law that makes plans under ERISA not subject to most creditors.

 

Hope that helps as you examine the California laws.

Best wishes.

 

 

 

 

jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3039
Experience: I've prepared all types of taxes since 1987.
jgordosea and 5 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.