Ask The Taxman: Is everything I own fair game for the IRS, in a collection case?
Answer
The Law Exempts Specific Assets Up A Certain Limit
As of October 2015, under Section 6334 of the tax code, your specific assets are exempt from collections up to a specific level, as listed below;
- Fuel, provision, Furniture and personal effects, up to $7,700 in value.
- Publication and Tools necessary for your job or profession, up to $3,860 in value.
- Books for school
- Clothing for you and your family are also protected.
Exempted Income
The IRS cannot take your unemployment benefits, workmen’s compensation, public assistance, Assistance under the Job Training Partnership Act, court-ordered child support and more than 15% of your social security benefits.
The IRS may also not take income received under the Railroad Retirement Act, any special pension received as a Metal of Honor recipient or certain service connected disability payments.
Minimum Exemption for Wages, Salary and Other Income
The IRS must allow someone who is being garnished a specific amount of income based up the taxpayer filing status and number of exemptions.
No Equity Rule
The IRS will not take property that, if sold, would not result in any payment towards the debt. Example, if you have a car worth $7,500 and you owe $8,000 , the IRS cannot take the vehicle because the sale of that vehicle will not result any payment toward your IRS debt.
Home Seizure
In addition to the no equity rule, the IRS cannot take your home if you owe under $5,000.