Can the IRS take away your IRA Pt II

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Earlier in the month I pointed out an article on the subject of if the IRS can take away your IRA.

For some reason people seem to be astounded and incensed the IRS can take away their retirement plan.  Keep in mind the IRS has some pretty strong powers, in particular the power to levy (legal speak for take away), “upon all property and rights to property” a taxpayer has.  By the way, have you heard of the IRS garnishing someone’s wages?  Levy is the official word that the IRS uses when it takes away someone’s property.

Since an IRA is property of the taxpayer the IRS has the right to levy on that asset.  Don’t think this is true?  Here is a memo talking about how the IRS can take away your IRA.

The key point to keep in mind is the phrase used in the memo about how the IRS can , “step into the shoes of the taxpayer and acquire whatever rights to the property the taxpayer possess”.  There are a number of strategies to use with IRAs that curtail the rights the IRA owner has, and thus curtail the rights of anyone who tries to take them away as well.  The key is to just follow the IRS memo.  It says that the IRS can take whatever rights to the property the taxpayer has.

Ok, lets just make it so that your rights to the IRAs investments are limited.  Either that or you have no control over the IRAs assets.  Once you accomplish that, you’ve effectively protected your IRA from being taken away from the IRS.