Risks to Your Pension

You've been served an IRS notice threatening to seize the assets you've labored hard for all your life – your car, home, and even pension. Yes, IRS problems causes stress. Though most assets may be seized to settle your tax debt, there are some assets that are exempted, such as:

• Clothing and school books
• Fuel, food, furniture, and personal effects with a total of $2,500
• Tools and books that are job related with a total of $1,250
• Job training, public assistance, worker's compensation, and unemployment benefits
• Undelivered mail
• Certain annuity and pension benefits, such as the Railroad Unemployment Insurance Act, Railroad Retirement Act, Retired Serviceman's Family Protection and Survivor Benefit Plan, and Special Pensions for Medal of Honor recipients
• Certain service-oriented disability payments
• Deposits to the special Treasury fund made by members of the armed forces and Public Health Service employees who are on permanent duty overseas
• A minimum amount exempt from a levy on other income, salary, and wages

Notice that the list says "certain annuity and pension benefits". They aren't exempted from the IRS totally. Your pension may be at risk if you need to pay a large sum to the IRS. Assets are seized in order, normally:

• Bank and checking accounts
• Cars, boats, planes, and luxury vehicles
• Cash value life insurance
• Accounts receivable
• Stocks and bonds
• Salary
• Collectibles
• Investment and holiday real estate
• Pensions, IRAs, and Keoghs
• Home

As you can see, pensions are way below on the list. Penalties and interest are accruing on top of your bill, something you need to know, even if the IRS only seizes enough assets to pay your bill. Your pension is at risk when there are no other assets available to cover the tax bill.

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Originally posted 2008-01-20 05:08:36. Republished by Blog Post Promoter

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