IRS Property Seizure FAQ

Owe a significant amount from compounding back taxes, interest and penalties? Do not make a mistake in believing the IRS will go away or is too cash strapped to come after you. The nation's most aggressive collection agency is working your case and has some powerful tools at its disposal.

From our years helping taxpayers resolve back tax issues, we often encounter misperceptions about what the Service can actually do. In this FAQ, we answer some of these questions.

Can The IRS Take My Home?

The simple answer is yes. Will the IRS seize your house and sell it? There are many steps in the process, which means this does not happen overnight. When it gets to this point, agents will request permission to enter your home. You can sign your name on a form and walk away. Or if you disagree with the action, the IRS must apply for a seizure order from a U.S. District Court Judge or Magistrate.

IRS agents with a seizure order show up sometimes with weapons. After you collect personal belongings, they will padlock the premises and post public notices and you're your property to the highest bidder. Whatever the sale brings in is then applied to your tax debt.

The good news is that you have time to seek help. Problems arise if and when you ignore IRS collection notices. You have the ability to appeal a tax bill and penalty assessments - take advantage of this right early and then you may never face the loss of your home.

Can The IRS Take Other Property? Are My Bank Accounts And Vehicles At Risk?

Again, the answer is yes. Liquid assets in your savings, checking or investment accounts are usually the first targets. When the IRS files a levy against a bank account, it allows a 21-day period to sort things out.

During this time, you can negotiate a payment arrangement or notify the IRS of errors that might affect the levy. Once a bank receives an IRS levy notice, the funds in the account at that time are frozen. It wouldn't generally apply to deposits after the levy date.

With so many bills paid by direct debit, having an account frozen can wreck financial havoc. If you ever received a notice that contains the word levy, get immediate legal assistance to avoid having assets frozen.

Vehicles are a lower priority with the seizure machine. If you have a valuable automobile like a collector car or expensive sports car that the IRS discovers, your need to take steps to protect this property by working out a solution to deal with back taxes.

Can I Challenge A Wrongful Levy Claim?

Yes, you can. This option is available as long as the IRS still possesses your property and you may be able to get it back. The process from seizure to sale can be quicker than you recognize, so once property is taken act fast.

If the IRS has already sold off your property, you have up to two years to file a wrongful levy lawsuit. But you may be limited to recouping only the amount that the IRS received from the sale, which could be much lower than fair value.

What Steps Can Avoid Property Seizure?

The first and arguably most important step is to send an email requesting a free consultation with a tax attorney. If you are facing a levy of property, the situation has become dire and you need to bring in the big guns.

From our headquarters in Michigan, our skilled attorneys provide tax defense representation nationwide. Please review some of our past results on our site as they speak for themselves.