The IRS, the federal agency tasked with overseeing tax collection and investigations into tax fraud and evasion, is known to have a lot of power. If an agent suspects you of underreporting income, claiming false deductions, or other misdeeds based on the information you filed in your tax returns, they are likely to open an audit. If the audit leads to a discovery of incorrect or false information on your returns, whether willful or non-willful, you could end up facing large amounts of back taxes, as well as interest and fines and fees assessed by the agency. If you fail to make payments toward these debts, the IRS has many powerful tools at its disposal to get what it is owed.
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Can the IRS Seize Your Property If You Owe Delinquent Taxes?
The answer to this question is yes. The IRS can seize some of your property, including your house if you owe back taxes and are not complying with any payment plan you may have entered. This is known as a tax levy or tax garnishment. Typically, the IRS will start by garnishing your wages, salary, or commission. If this is insufficient or if you are not employed, they may proceed to seize money and assets in your bank or retirement accounts. Usually, a bank will hold the funds in your account for 21 days to allow for any disputes as to who owns the funds to be worked out, which may give you time to work with the IRS to find another way to remedy the situation. The amount available to be seized from a retirement account will depend on whether you have a vested right.
The IRS will also have the ability to go after property, such as your home and your car. However, before the IRS can sell these items, they will have to calculate a minimum bidding price, which you can challenge. If there are leftover funds after the house is sold and your tax debt has been paid off, you will be entitled to receive it.
When Will the IRS Seize My House or Other Property?
While the IRS certainly has the power to seize your assets if you are delinquent on your tax bill, they will usually try first to come to some sort of agreement with you, such as getting you on a payment plan. An experienced tax lawyer like those at the Tax Law Offices of David W. Klasing can help you negotiate with the IRS before they begin proceedings to initiate a tax garnishment, and you end up in serious trouble.
Before imposing a tax levy on your property, the IRS is required to follow a series of procedures set under a national standard. First, they must mail a tax bill to you, which will be titled something along the lines of:
“Notice and Demand for Payment.” If the taxpayer ignores the bill or simply refuses to pay it, and has exhausted all their appeal options, the IRS will send them another final notice. If you do not reply to this notice within 30 days to request a hearing, the IRS may take immediate action to seize the property. Once this process has begun, it can be difficult to reverse it and get you back into compliance, so you need to act immediately to retain a tax attorney after receiving a final notice if you have not already done so.
How Can A Tax Attorney Help Prevent the IRS from Taking My House?
A skilled tax attorney like those at the Tax Law Offices of David W. Klasing will be able to assess your particular situation and choose between several different options, including negotiating an alternative arrangement with the IRS. This can be done by filing a request for a due process hearing through the IRS Collection Due Process Department (CDD) within 30 days of receiving the final notice of a tax garnishment or levy. This appeal hearing will typically be scheduled within 60 to 90 days.
At this hearing, we will first need to show documentation evidencing your ability to pay the back taxes. If you cannot pay back those taxes, the IRS compliance officer may refuse to discuss the merits of the case because no alternative payment method exists. The goal of this hearing is to try to work out a deal where you pay what you owe without the levy or garnishment being imposed. Our experienced tax attorneys at the Tax Law Offices of David W. Klasing have been through many of these hearings and can help bring the matter to the best possible resolution for you. If no deal can be reached, we can file an appeal with the Tax Court, among other options.
If You Are Afraid the IRS May Seize Your Home Due to Delinquent Taxes, Call Our Battle-Tested Tax Lawyers Today
The best way to prevent a situation where the IRS wants to seize your property through a tax levy or garnishment is to hire an experienced tax professional like those at the Tax Law Offices of David W. Klasing. We will help you file your returns and be sure that everything is complete and accurate. However, if you find yourself deep in tax debt to the IRS, our skilled tax lawyers may still be able to help negotiate a situation where you make payment against the debt without having your home or other property seized. To schedule a consultation, call our firm at (800) 681-1295 today.
Regardless of your business or individual tax needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.
In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.
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