IRS Seizures

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The IRS may use seizures as a last resort to collect large amounts of back taxes that a person may have owed for many years. In most cases, the amount of back taxes is quickly dwarfed by the amount of penalties levied on top of it. This is because penalties and interest are applied to any unpaid balances each year, and this additional amount can accrue quickly. The penalties are compounded every year, which can make the amount owed grow in a hurry. Seizing property is an extreme measure for the IRS to take to collect back its money, but it's not rare.

If the IRS does seize a person's possessions, they can do so without taking that person to court or getting a judgment from the court. Because of this, seizures are a very powerful tool in the collection of taxes and one that taxpayers will do anything to avoid. In a seizure, the IRS is allowed to take possession of a person's belonging to recoup the amount owed. They will then sell the possessions to redeem the money owed from the taxpayer.

Some of the possessions the IRS may confiscate include all bank accounts, earnings and wages, any federal pensions, any Social Security benefits, the liquidity of any life insurance, personal real estate owned, assets that have been transferred to family or friends, goods such as vehicles or furniture, and any business property or real estate.

When seizing homes and businesses, the District Director of the IRS can simply sign a form and the taxpayer is suddenly without a home or business. An exception to this is that if the amount owed is $5,000 or less, in which case the IRS cannot take the person's home. The IRS may, however, seize a business. The IRS first attempts to gain the owner's permission to enter the business to shut it down. If the owner refuses to permit this, the IRS can apply for a court order to execute the seizure.

There are things a person can do to stop the IRS from taking their property. One is to appeal for a due process hearing. Here, the person may question the validity of the seizures or the amount of taxes that are due. In this case, the taxpayer may ask for an offer in compromise. Even if it's not granted, the person will have gained some extra time to pay off the taxes owed.

Property seizures can be emotionally and mentally draining. No one likes to have their possessions taken away from them, but this is a very real possibility. Federal forfeiture laws give the government the ability to take personal assets away from an individual if back taxes are owed, or if there is a suspicion of criminal activity. An individual has 30 days to respond to a notice of property seizure. If after that time no contact has been made, the IRS is able to proceed with the collection of their debt.

Professional tax attorneys keep up with the law and its intricacies and understand how it applies to taxpayers. The IRS is a large and powerful organization, and trying to handle tax issues on your own can be frustrating and time consuming. When fines and penalties are assessed based on strict deadlines, you don't want to waste time. Qualified tax attorneys many of them former IRS workers themselves navigate the system of the IRS daily and understand how to work within this system. It may be in your best interest to contact a tax attorney to assist you in working with the IRS to maintain or reclaim your personal property.