Bank Accounts The IRS Can’t Touch: A Comprehensive Guide

As a taxpayer, you may have concerns about the Internal Revenue Service (IRS) seizing your bank accounts to satisfy tax debts owed. However, under certain circumstances, there are bank accounts the IRS can’t touch. In this article, we will explore what those situations are and how you can protect your funds.

Bank Accounts The IRS Can’t Touch: A Comprehensive Guide

Understanding Levy

Before we dive into the types of bank accounts the IRS can’t touch, let’s first discuss what levy is. Levy is a legal seizure of property to satisfy a debt or obligation. When it comes to tax-related matters, if you fail to pay your taxes in full and on time, the IRS may use levy as a means to collect what is owed. They can do this by freezing your bank account(s), withdrawals from them, or even taking money from them directly.

Exempt Bank Accounts

Fortunately, some bank accounts are exempt from levies issued by the IRS. Here are some of the most common types:

1. Retirement Accounts

Retirement accounts such as 401(k)s, IRAs, and Keoghs are typically exempt from levies issued by the IRS. This means that even if you owe taxes to the government, they cannot take money out of these types of accounts to satisfy your debt.

However, it’s important to note that if you withdraw money from these accounts before reaching retirement age (usually 59 ½ years old), you may be subject to an early withdrawal penalty on top of income tax.

2. Life Insurance Policies & Annuities

Life insurance policies and annuities are also usually safe from IRS levies. They are considered assets whose purpose is beyond satisfying tax debts and therefore not subject to seizure.

Keep in mind though; this exemption applies only after death for life insurance policies while annuities’ extent depends on its type.

3. Accounts Held Jointly With Someone Else

Bank accounts that are held jointly with someone else, such as a spouse or business partner, may be exempt from IRS levies. The reasoning behind this is that the funds in these accounts belong to both parties, and therefore only half of the account may be subject to seizure rather than the entire balance.

However, it’s essential to note that if you have a joint bank account with someone who owes taxes to the IRS, the entire balance of the account could be at risk.

4. Social Security Benefits

Social Security benefits received monthly by eligible beneficiaries are not considered taxable income by default. As such, these benefits are generally safe from IRS levies.

It’s worth noting though; these benefits can still be garnished for things like child support payments or other legal debts unrelated to taxes.

Protecting Your Bank Account(s) From Levies

While some bank accounts are exempt from IRS levies by law, others may not be. To protect your bank account(s) from being seized by the government due to unpaid tax debts or other legal debts related to taxes like Child support payments:

  1. Pay your taxes on time: Ensure you file your return before April 15th and pay any amounts owed within that period too.

  2. Work out an installment plan with the IRS: If you’re unable to pay off what you owe in full immediately after filing your tax return, talk with an IRS representative about setting up a payment plan so they can’t seize your assets.

  3. Seek Legal Help: If you feel like your rights have been trampled upon or have concerns regarding tax lien releases or back taxes owed but haven’t been paid yet.


In conclusion, there are indeed bank accounts that the Internal Revenue Service (IRS) cannot touch under certain circumstances. These include retirement accounts like 401(k)s and IRAs, life insurance policies & annuities, joint bank accounts, and social security benefits.

However, it’s worth noting that these exemptions are subject to some restrictions. Therefore, if you want to guarantee your funds’ safety from the IRS, it is essential to take the necessary steps above or consult a tax attorney.


What are the bank accounts that the IRS can’t touch?

Bank accounts that the IRS can’t touch include retirement accounts, life insurance policies, and trusts. It’s important to note that there are certain rules and limitations for each of these types of accounts.

Can the IRS seize my savings account?

Yes, the IRS has the power to seize funds from your savings account if you owe back taxes. However, there are some exceptions such as Social Security benefits that are protected from seizure by law.

Can I protect my money from an IRS levy by moving it to a foreign bank account?

No, you cannot protect your money from an IRS levy by moving it to a foreign bank account. The government has agreements with many other countries to share financial information, making it very difficult to hide assets from the IRS.

Are joint bank accounts safe from an IRS levy?

Joint bank accounts can be at risk of an IRS levy if one or both account holders owe back taxes. The entire balance of the joint account could be seized even if only one person is responsible for the debt.

Can I use my business bank account as a personal piggy bank without worrying about IRS problems?

No, using your business bank account as a personal piggy bank is not advisable and could lead to legal trouble with the IRS. As a business owner, you need to keep accurate records separating personal expenses from business expenses in order to avoid any confusion during tax time.

Are online-only banks safer from an IRA tax lien than traditional brick-and-mortar banks?

Online-only banks are not necessarily safer from an IRA tax lien than traditional brick-and-mortar banks because both types of institutions must comply with federal laws and regulations related to levies and liens imposed by government agencies.

Can the IRS take money from my checking account if I owe back taxes?

Yes, the IRS can take money from your checking account if you owe back taxes. This is known as a levy and it allows the government to seize funds directly from your bank account to satisfy your debt.

How much of my retirement account is protected from an IRS tax lien?

Retirement accounts such as 401(k)s and IRAs are generally protected from an IRS tax lien up to $1 million, but this amount can vary depending on your age and other factors. It’s important to consult with a financial advisor or tax professional for more information.

Are there any loopholes that allow me to hide money from the IRS in offshore bank accounts?

No, there are no legal loopholes that allow taxpayers to hide money in offshore bank accounts to avoid paying taxes. The government has strict reporting requirements for foreign financial assets and failure to comply could result in serious penalties.

How can I protect my personal assets if my business owes back taxes?

One way to protect your personal assets if your business owes back taxes is by forming a limited liability company (LLC) or corporation which creates a separate legal entity for your business. This helps shield personal assets from being seized by the IRS due to business debts.

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