IRS Levy on Retirement Accounts – Can They Take My 401(k) or IRA?
Think Retirement Funds Are Safe from the IRS? Think Again.
Most taxpayers assume their 401(k), IRA, or pension is untouchable when it comes to IRS collections—but that’s not always true.
While the IRS doesn’t go after retirement accounts as often as bank accounts or wages, they do have the legal authority to levy these assets under certain conditions.
In this post, we explain when the IRS can levy your retirement, how it works, and how to protect your savings before it's too late.
Can the IRS Levy a Retirement Account?
Yes—under IRC §6331, the IRS has authority to levy most retirement assets, including:
- Traditional and Roth IRAs
- 401(k) and 403(b) accounts
- Self-employed retirement accounts (SEP, SIMPLE)
- TSP (Thrift Savings Plans)
- Some pensions and annuities
However, they typically only do this in serious cases where:
- The taxpayer has ignored repeated notices
- There’s significant tax debt
- All other collection avenues have failed
- The taxpayer has access to withdraw the funds
Related: IRS Levy vs IRS Lien – What’s the Difference?
What Retirement Accounts Are Exempt?
- Social Security Income is partially protected (but may still be levied at 15%)
- Supplemental Security Income (SSI) is fully exempt
- Certain employer pension plans may be protected under ERISA, but only from private creditors—not the IRS
How Does an IRS Retirement Levy Work?
- The IRS sends Final Notice of Intent to Levy (Letter 1058 or LT11)
- If no action is taken in 30 days, the IRS may issue a levy
- The IRS contacts your plan administrator or financial institution
- The funds are frozen or withdrawn and sent directly to the IRS
Related: IRS Notice of Intent to Levy – Urgent Steps to Take
Will the IRS Levy Your Retirement Without Warning?
No. The IRS must:
- Assess the tax
- Send a notice and demand for payment
- Send a final notice at least 30 days before levying
Related: What to Do After Receiving a CP504 Notice
If you never received this notice, the levy may be improper.
Related: IRS Garnished My Wages Without Notice – Is That Legal?
What If You’re Not Yet Retired?
If the IRS levies your 401(k) before you’ve reached retirement age or while it’s still protected by plan rules, they may not be able to take the funds unless:
- You have a current right to withdraw (e.g., separated from employer)
- The plan allows in-service distributions
In many cases, the IRS cannot force a distribution before you’re eligible—but they will levy the account once it becomes accessible.
How to Stop the IRS from Levying Your Retirement
1. Respond to Notices Immediately
Don’t ignore CP504, LT11, or other levy warnings. Request a Collection Due Process hearing using Form 12153 if you’re within the 30-day deadline.
Related: IRS Collection Appeals Program (CAP) vs CDP Hearings – What’s the Difference?
2. Enter a Resolution
Options include:
These can stop the levy and preserve your retirement funds.
3. Request a Levy Release or Taxpayer Advocate Intervention
If the levy was wrongful or causes serious hardship, you may:
- Request a manual release
- File Form 911 for Taxpayer Advocate help
- Provide Form 433-A with financials proving hardship
We Help Orange County Taxpayers Protect Their Retirement from the IRS
At Boulanger CPA and Consulting PC, we:
- Stop IRS levies on retirement accounts
- File emergency appeals and hardship requests
- Negotiate settlement or payment plans
- Restore access to retirement funds
📞 Call (657) 218-5700 or request a strategy call at www.orangecounty.cpa
FAQ: IRS Retirement Account Levies
Can the IRS take my IRA or 401(k)?
Yes—if the funds are accessible and you ignore notices, the IRS can levy retirement accounts.
Are any retirement accounts protected?
SSI is protected. 401(k)s may be protected before retirement age, depending on plan terms.
Can I stop the levy after it starts?
Possibly—if you request a manual release, prove hardship, or enter a resolution.
What if I’m still working and haven’t touched the 401(k)?
The IRS may not be able to access the funds until you separate from the employer or become eligible for withdrawals.
📣 About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
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