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Can the IRS take money from an international bank account?

| Mar 8, 2018 | blog

You owe money for back taxes. You know it and the IRS knows it.

However, you’ve also moved overseas. You haven’t actually lived in the United States in some time, and all of your money is in a bank outside of the country.

You know that the IRS has a lot of power to seize assets. They can take money from paychecks, they can levy bank accounts and they can take benefits payments — such as Social Security payments. They do not care how much money you have or what you need. They can simply take money against that debt that you owe, from a multitude of sources.

But what about your international accounts? Are those safe, or can they levy bank accounts that aren’t even in the United States? Just how far does the IRS reach?

Taking international assets

In many cases, the IRS can take money from international bank accounts. Those can get levied, just like domestic accounts. You may wake up and find out that your money is gone.

However, the IRS does not have complete free reign over accounts all over the world. It is a U.S. agency and it does serve the U.S. government. So, the real questions are what bank controls your current accounts and whether or not that bank also has offices that are in the United States.

An example: Accounts in Panama

For instance, maybe you moved to Panama in 2017. You moved all of your money with you, and you have it at HSBC Panama.

You’re active on social media, and the IRS uses that to figure out where you went. They identify the bank with which you opened the accounts.

Since it’s HSBC, you’re in trouble. After all, there is an HSBC N.Y. branch in New York. Since that office is inside the borders of the U.S., the IRS now has all sorts of easy options. They can simply contact HSBC N.Y. to tell them about the levy and the tax debt. That office then forwards the message on to the offices in Panama. When they see it, they allow the IRS to seize your money and send it back to the U.S. through those channels.

Know your legal options

As you can see, your money is not out of reach just because you’re overseas. Never assume that it is. Be sure you understand the true reach of the IRS and all of the options they have at their disposal.

At the same time, make sure you know all of your own legal options when facing serious tax debts. There are ways to get things straightened out, rather than just waiting for that other shoe to drop.