Notice of Levy-Take Levy Proceeds from their IRA?

Question:

We recently received a Notice of Levy on a customer from the IRS. Can we take the levy proceeds from their IRA?

Answer:

Read the form. In the center of the page, inside the box it says: THIS LEVY WON'T ATTACH FUNDS IN IRA's, SELF EMPLOYED INDIVIDUAL'S RETIREMENT PLANS, OR ANY OTHER RETIREMENT PLANS IN YOUR POSSSESSION OR CONTROL, UNLESS IT IS SIGNED IN THE BLOCK TO THE RIGHT. [ARROW] (Capitalization in original.)

IRA's are not exempt from IRS levy. However, strictly as a matter of policy, the IRS does not normally levy against them. If they are fed up with your customer, they will sign the form where indicated and you will process the levy against the IRA. Otherwise, you will not.

First published on BankersOnline.com 12/12/11