Vested pension rights can be levied before payout

Plain-English summary

Chief Counsel addressed a field question about levying a taxpayer’s pension-plan interest before the taxpayer had requested a distribution and before any proceeds existed. The advice states that the IRS can levy if the taxpayer already has vested property rights in the pension plan. It distinguishes the existence of property subject to levy from the later question of when the plan, as levy source, must turn over funds in response.

Ruling snapshot

• Question: Can the IRS levy a vested pension-plan interest before the taxpayer requests or receives a distribution?
• Outcome: Advice given
• Key authorities: IRC § 6331

Full text (IRS public release)

ID: CCA-08280238-15 [Third Party Communication:

UILC: 6331.00-00
Date of Communication: Month DD, YYYY]

Number: 201545024
Release Date: 11/6/2015
From: --------------------
Sent: Friday, August 28, 2015 2:38:07 PM
To: ---------------
Cc:
Bcc:
Subject: FW: Levy question from the field

One thing in addition to the voice message I left earlier this week. Reading over the email from
------ again, I noticed the question suggests that the tp had not yet made the request and there were no proceeds yet. I should clarify that that if the tp has any vested property rights in a pension plan, the Service can levy. The issue becomes when the levy source is obligated to turn over funds in response to the levy.