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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12690
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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OK, I have a tax lien and until recently had an installment

Customer Question

OK, I have a tax lien and until recently had an installment plan. They want to either (a) renegotiate the payments or (b) get an offer in compromise. My income is not great enough to pay off the debt quickly enough, and the only other option is to refinance the house and cash in the 403(b). Is the 403(b) 'collectible' by the IRS?
Submitted: 2 years ago.
Category: Tax
Expert:  Lane replied 2 years ago.
Although the 401(b) is attachable, they will typically exhaust ALL other means of collection first.
Just as IRS is not in the business of taking homes, (although they may put a lien on the home making it impossible to sell or refinance and access cash), ...
... they are not in the business of taking away a person's retirement livelihood.
Because 403(b)s are not covered by ERISA (as 401(k)s and pensions are) they are easier to attach than plans where there is a trustee, and technically the trustee owns the plan and, legally/technically, the participant is what's called a beneficiary.
But, again, it's usually the very last thing and in my experience when they DO attach, they have allowed for a basic retirement lifestyle to be protected (meaning they don't attach ALL of it.
But, just so you have all the facts - so sorry - they can.
Let me know if you have questions ...
I hope you'll rate me positively, using the stars on your screen … (that's the only way we get credit for the work here) … based on thoroughness and accuracy, rather than any good news/bad news content   ...   Hopefully, having all the facts will help you "see around some corners."
Expert:  Lane replied 2 years ago.
I received the alert that you didn't accept the phone consult.
That's fine ... I almost always do that just so you'll have the option.
If you have any other questions at all, let me know here and we can go from there.
Otherwise, , I would appreciate a positive rating (using the stars or smiley faces on your screen)… That’s the ONLY WAY I'm credited for the work here.