[dklawson]

I currently have a sizable tax lien, and I am paying on an installment agreement with the IRS for back taxes. I have around $45,000 in a 401(k) of which I now have the option to rollover into an IRA. The IRS has to-date not tried to seize any funds from my 401(k). If I decide to move the funds to an IRA, will it be easier for the IRS to seize the money?

[MukatA]

IRS will not take 401(k) or IRA money. If you want to do rollover, don't get money in your hands. Get it done through the investment company.

[AtlantaTaxExpert]

MukatA, that is NOT true.

If the tax lien is large enough, the IRS CAN and WILL go after money inside an IRA or 401(k) if they determine that is the only way they can get the taxes paid. That is why there is a provision in the law that waives the 10% Early Withdrawal Penalty for IRS garnishment of such pension funds.

However, as long as DKLawson remains current on his payment plan, the IRS will not likely attach the 401(k) or IRA.