IRS Seizures-The Internal Revenue Service (IRS) can seize a taxpayer’s assets to satisfy unpaid back taxes. The IRS can seize assets such as 401k accounts, IRA accounts, vehicles, RVs, boats, primary residences, rental properties, jewelry, and any other asset with monetary value. If there is equity in the asset, the IRS has the right to seize it to satisfy unpaid back taxes.
IRS Seizure Process
When the IRS seizes your property, they can sell your interest minus any loans against the property and apply any proceeds to the balance owed on the account. Once the IRS has issued a final demand notice, they can seize your assets after 30 days of the date on the letter. The first course of collection action is bank levies, wage garnishment, social security levies, and pension levies. The second course of action is generally enforced by a Revenue Officer (RO) after they have attempted to work with the taxpayer to recover the unpaid taxes. This includes the seizure of all tangible assets such as homes, vehicles, etc.
If a taxpayer has unpaid tax debt with the IRS, avoiding the IRS will not solve the problem but worsen it. The IRS is the largest collection agency in the United States. It is best to work out an arrangement with the IRS in the form of an Installment Agreement, Offer In Compromise, Currently Non Collectable State (CNC), or other resolution options available for taxpayers to avoid seizure of assets.
How Lifeback Tax Resolves IRS Seizures
It is always recommended to seek a tax professional when dealing with the IRS. IRS hold times can be exhausting, overwhelming, and intimidating. Our tax professionals know the proper channels needed to navigate the IRS roadmap and get the resolution needed for you to get your life back.
IRS Seizures FAQs
The IRS is required to release a seizure if it determines
(1) you have paid your debt
(2) the period of collection ended prior to seizure
(3) release of the seizure will help you pay your debt
(4) you enter into an installment agreement with the IRS that does not allow seizure
(5) the IRS agrees the seizure creates an economic hardship, i.e. it prevents you from meeting basic and reasonable living expenses
(6) the value of the property is more than the amount owed and releasing the seizure will not hinder the IRS to collect the debt.
The IRS will sell your interest in the property and apply the proceeds of the sale to your tax debt.
Yes. However, the IRS cannot seize your home in various circumstances including if you have an offer in compromise or the IRS agrees seizing the property would result in an ability to meet basic, reasonable living expenses.
It depends. Generally, the IRS is required to provide you notice prior to seizure. The process may be delayed if you request a hearing or wish to enter into an offer of compromise.
The IRS can seize assets including:
• wages and salary
• bank account funds
• retirement accounts
• your home, your car, and other property.
The IRS cannot seize:
• unemployment benefits
• certain annuity and pension benefits
• certain service-connected disability payments, worker’s compensation, and other assets.
Yes. However, the non-debtor must be compensated by the IRS.