OIC & Untouchable Retirement Accts

[GTS1101]

I have a client who works for staples. She spoke with their HR dept and they told her that she would not be able to take a hardship withdrawal from her 401k plan to pay her taxes. So if she can't take the funds do I still have to show as an asset when filling out form 433-A?

Husband works for the State of California and he is not allowed to touch his pension for any purpose until he reaches retirement age. So the same question is do I have to show as asset the value of the account since he cannot access those funds to pay the balance they owe the IRS.

Thanks!
GTS1101

[rfk]

I believe you have to

show all assets unless specifically exempted by law. Review the case law and see what is said if available. Might try the instructions for 656 relevant to 433-A.

rfk

[taxea]

I have a client who works for staples. She spoke with their HR dept and they told her that she would not be able to take a hardship withdrawal from her 401k plan to pay her taxes. So if she can't take the funds do I still have to show as an asset when filling out form 433-A?

Husband works for the State of California and he is not allowed to touch his pension for any purpose until he reaches retirement age. So the same question is do I have to show as asset the value of the account since he cannot access those funds to pay the balance they owe the IRS.

Thanks!
GTS1101

IRS payments do not qualify as a hardship. She could take a loan from it but I would not advise she do that. How about equity loan on her house or personal loan from bank or credit union.
Taking money out of retirement is a bad, bad, bad idea.

[Golden Rocket]

Raise the Question

Just because she cannot access her retirement funds to pay taxes....

Does it follow that these funds are protected against an IRS levy???

In similar fashion about the California retirement being such that the individual cannot invade these funds for any reason....

What if the state of California needed to levy to collect back taxes to the State. Is the California retirement protected from the State of California???

Don't know the answer for certain, but it's funny how governments can exempt themselves from laws that protect us from other parties...