The IRS generally only levies retirement account funds when there are no other alternatives. If you don’t have other valuable assets and have failed to cooperate with the IRS, it’s possible that the money in your retirement account will be seized.
However, there are many ways to avoid a retirement account levy, and there are limitations on the ability of the IRS to seize your retirement account funds.
Access To Retirement Account Funds
The IRS can only “step into your shoes” and get rights that you also possess. Many retirement accounts limit access to the funds until retirement, so you don’t currently have an unrestricted right to access the money.
However, the IRS can seize your right to receive retirement income in the future, and can even seize property after the statute of limitations on collection has expired if the levy occurs before it expires. For example, the IRS levies your future right to receive retirement income, and then the collections statute expires. Once you have the right to receive the retirement income, the levy remains enforceable.