The IRS uses property seizure as a last resort when attempting to resolve tax debt. While the notion of having a car, house or bank account seized can be terrifying for many individuals and families, the IRS employs various rules, regulations and procedures to ensure that tax-payers are protected and are given every opportunity possible to resolve the tax debt either through litigation or offers in compromise. However, even with strict controls in place, the seizing of assets can run afoul of common sense.
The IRS Seized What?
Here are 5 times when IRS property seizure seemed to contradict common sense.
- Hair care products: In 2015, the IRS seized a full supply of Aveda hair care products, a dermabrasion machine and more equipment from an Alabama hair salon.
- Parking spaces: A pair of parking spaces in the city of Boston were seized in 2013. They were sold at auction for $280,000 each.
- Darryl Strawberry’s New York Mets salary: The IRS had seized the rights to Darryl Strawberry’s deferred Mets salary from the team option portion of his 1990 contract. They auctioned off the salary rights in 2015.
- A rapper’s property: Popular rapper Young Buck filed bankruptcy in 2012 and the IRS seized numerous assets. The rapper reportedly bought many his own seized items at auction.
- Native American land: The IRS claimed the Crow Creek Sioux failed to pay more than $3 million in taxes over the course of several years from 2003. The tribe argued that they were incorrectly informed that as a federally recognized tribe they were not required to pay federal taxes. More than 7,000 acres of land were sold to a private bidder in 2009.
Am I safe?
Asset seizure is a powerful debt collection tool and the IRS is given broad authority in these matters. In recent years, however, many controls were put in place – including an annual audit of the IRS itself – to ensure they were following the strict procedures. While these stories of property seizure can seem strange – or even humorous – losing a home, car, bank account or collection of assets can be an emotionally painful event. If you are facing an IRS audit or fear the agency will attempt to seize your assets to recover debt, you need a skilled tax attorney on your side.