Benefits

• The state of Idaho prohibits any state or private entity from placing a lien on any pension or retirement plan, including IRAs, with one exception as of 2011, according to Title 11, Chapter 604A, of the Idaho Code: The state may place liens on IRA plans to satisfy child support obligations. Private or public entities can't place a lien on amounts received by beneficiaries if an IRA plan holder dies, regardless of whether the beneficiaries owe or the IRA holder owed money to creditors.
  
  

Considerations

• Because the 16th Amendment gives the U.S. government the power to levy income taxes, federal rules supersede Idaho's requirements when a resident owes tax debts to the federal government. The Internal Revenue Service may place liens on IRA plans as a last resort to collect delinquent taxes from taxpayers.
  
  

Limits

• Idaho law considers married couples as owning community property, whereby each spouse owns half of the couple’s retirement plans. The IRS may only place a lien on the half of an IRA that belongs to one spouse under certain circumstances, according to 5.17.2.5.2.4 of the Internal Revenue Manual. These situations may occur when a couple is going through the divorce process or filing separate returns as members of separate households.
  
  

Process

• If the IRS considers an Idaho taxpayer delinquent, the agency sends a "Notice and Demand for Payment" letter, which the resident must respond to within 10 days. The IRS then places administrative liens on other property first, such as bank accounts, real estate and vehicles. Should the resident refuse to repay the debt after an amount of time determined by the IRS on a case-by-case basis, the agency places a lien on his retirement accounts.
  
  

Consequences

• Idaho residents can pay off their federal tax debts at any time to have liens removed within 30 days of payment. If a resident cashes out part of his IRA plan and doesn't make payments on owed tax, his IRA plan administrator removes amounts owed to the U.S. government from the taxpayer's distributions and remits these monies to the IRS.