Tax Debt Solutions Blog

Tax Relief Tip: Guard Your Assets

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Safeguarding Your Assets from the IRS

When the IRS is attempting to collect from you it is unlawful to transfer assets as a means of keeping them from the IRS.  However, if you plan ahead and use a family member you can lawfully protect your assets.  If you go ahead with transfer you may not be able to retrieve your assets.  No plan of protection is flawless and the IRS has the legal power to recover transferred assets.  Don’t do an unlawful transfer and avoid a fraudulent action on creditors including the IRS.

You can protect your assets by:

Find a corporation that will allow your assets to be transferred to them.  IRS could take corporate assets if it suspects a fake transfer.

Place assets into a partnership that is owned by family only.  A joint tenancy is not sufficient so seek counsel from an expert.

 Place assets in a trust for a family member or spouse.  A living trust means you control the assets.  The IRS won’t accept this kind of arrangement.  They are distrustful of off- shore trusts.

 Use an insurance trust for life insurance policies.  This must be carried out prior to tax difficulties.

 Retirement plans and 401(k) accounts must be completely funded.  Although they can the IRS disapproves of taking plans that are non-ERISA eligible.  You can lower the 401(k) account by borrowing against it in case of IRS seizure.

 Complete transfer of assets to your family members.  This will avoid an IRS tax bill on property you want to bequeath to your children on your death.

 File separate tax returns.  The IRS can take a married couple’s refunds if they file jointly.  If one spouse owes then a separate tax return protects the other.

 Tax Debtors Overseas

 You may have to leave the country with all your assets.  The IRS computer is linked to US Customs and Immigration so you may have to stay abroad for good.  A large number of countries allow the IRS to collect taxes owed by US tax payers.