Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

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

of creditors. My 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?
Show More
Show Less
Ask Your Own Tax Question
Answered in 11 minutes by:
9/1/2013
jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
Verified

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.

 

Ask Your Own Tax Question
Customer reply replied 4 years 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.

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
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
Verified
jgordosea and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask jgordosea Your Own Question
jgordosea
jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
3,161 Satisfied Customers
Experience: I've prepared all types of taxes since 1987.

jgordosea is online now

A new question is answered every 9 seconds

How JustAnswer works:

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

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.WMatteson, 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.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, 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.

OrvilleHesperia, 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!!!!

AlexLos 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.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

3,161 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I retire in march of this year and I be receive disability
I retire in march of this year and I be receive disability check from social security and my pension. I just wanted to know how that will effect me and wife taxes. She still works. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Is there a retail inventory tax for the state of California?
Is there a retail inventory tax for the state of California and how does it differ from other states? Is it just a federal tax or is there no tax?… read more
DanielleCPA
DanielleCPA
Certified Public Accountant
Bachelor's Degree
76 satisfied customers
I am retired and my only income is SS retirement benefits.
I am retired and my only income is SS retirement benefits. My wife works and will make about $40,000.00 in 2017. I want to file married filing separate for 2017 - avoiding an any tax on my SS benefits… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I worked for Local Government Fayetteville NC and worked
I worked for Local Government Fayetteville NC and worked 23+years and am vested. My husband and I had a business and had a CPA doing our bookkeeping. When we sold business to son our daughter started … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
31 satisfied customers
I'm retired, receiving ss retirement benefits. From this
I'm retired, receiving ss retirement benefits. From this year I receive also social security retirement payments from Slovakia, where I lived and worked until 1986. Question: are these payments fro Sl… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
What are tax rules for an inherited Roth IRA, GA, the
what are tax rules for an inherited Roth IRA JA: Since estate law varies from place to place, can you tell me what state this is in? Customer: GA JA: What documents or supporting evidence do you have?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
As I worked for a non-profit there was no Roth IRA for the
As I worked for a non-profit there was no Roth IRA for the 403-b. I got laid off last year and haven't been able to find another job. I moved my IRA to a well-known investing company. I am almost 62 a… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Roth IRA. I have a very specific question about excess
Roth IRA. I have a very specific question about excess contributions to a Roth IRA. I am a tax preparer. My client made a Roth IRA contribution for 2016 in April of 2017. It then turned out that his i… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can the Internal Revenue Service Audit an Amended 1040 after
Can the Internal Revenue Service Audit an Amended 1040 after the statue of limitations expire ? If so , can you specify why and the federal statue in the Library Of Congress that allows the examinatio… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I have an old 457b retirement plan from a county government
I have an old 457b retirement plan from a county government job. I have not worked there in over 14 years. Is it possible to roll the money in it into an existing IRA, or 401k? Dwight, Maricopa, AZ.… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
I have a summary of my retirement plan balances. MGH says
I have a summary of my retirement plan balances. MGH says they do not owe me the money. It doesn't say projected or estimated, it says my balance as of 12/31/13 is 14, 698.00. Don't they owe me this m… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am retired with an income of $12,000/year from a pension a
hi. I am retired with an income of $12,000/year from a pension a d $12,000/year from ss before medicare deduction for a total of 24 000 annual income. I am 67 years old and for the past few years have… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I am trying to find out about a retirement plan Tax code
I am trying to find out about a retirement plan Tax code 702j retirement account? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
My wife has a traditional IRA, Roth IRA, 401K and a pension.
My wife has a traditional IRA, Roth IRA, 401K and a pension. I have a Rollover IRA, Roth IRA and two 401ks. We wish to divide all retirement funds 50/50 but I do not see a way to communicate that. Ide… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
If a person hasn't contributed Roth IRA (or any other plan)
If a person hasn't contributed Roth IRA (or any other plan) in the past few years, although he had employment income, could he still be able to use these accumulated room to contribute? If so, would t… read more
abci168
abci168
Principal
27 satisfied customers
IRS said the Roth IRA reported distribution was not held for
IRS said the Roth IRA reported distribution was not held for at least 5 years. It was. I was told I needed to send in a 8606 with my 2014 tax return. How do I go about doing that so I don't own the $1… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Does the Internal Revenue Service contact you by phone if
Does the Internal Revenue Service contact you by phone if they have any thing against you? I got a call from someone claiming to be from the internal revenue, saying I had a lawsuit against me?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Is a non-qualified retirement plan taxed at a normal tax?
Is a lump sum from a non-qualified (SERP), assuming no contribution was made by me and therefore no taxes ever paid, taxed at my ordinary income marginal tax rate? If so, can it be spread over future … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x