Delaying retirement won't nullify an IRS levy on plan assets.

Kiplinger Tax Letter, The, August, 2000

Delaying retirement won't nullify an IRS levy on plan assets. An executive owed taxes to IRS. When he reached 65, he stayed on the job and elected to defer payouts from the firm's 401(k) plan until he retired. Nonetheless, an IRS agent sent a levy to the plan to collect his tax debt.

The levy is valid even though benefits aren't immediately payable, the IRS privately rules. Debtor has a present right to future payments.

But collection must be deferred. The Service cannot force payouts from the plan until after the executive retires and distributions begin. His decision to keep working and postpone retirement cannot be overruled.