Home or business seizure by the IRS

Home or business seizure by the IRS

One of the most powerful government bodies in the United States is the Internal Revenue Service (IRS). It is an authoritative organization that is allowed to use lots of different ways to collect tax debts. One of the most upsetting ways they are able to reclaim any money that you owe through tax debt is by seizing your house or business. The number of IRS seizures against property like real estate, automobiles and business equipment increased from 74 in 2000 to 676 in 2007 proving it is now more than ever a very real threat.

The first steps of collecting debt

The first way the IRS can collect unresolved debt is through the mail with a bill explaining the debt. The longer the debt remains unpaid the larger it will get due to the penalties and interest so if possible paying the debt off as soon as you can could save you lots of money. However, if you are unable to pay your debt in full, it is advisable to make a payment of as much as you can in order to avoid more penalties and interests.

Always try to speak to and keep in contact with the IRS if you cannot pay your full outstanding bill. You could try and arrange a compromise or even a monthly installment plan.
Getting in contact with the IRS and making the necessary arrangements to make payments is important to avoid them starting the collection process which can lead to liens, levies and future IRS retention of tax refunds.

Your home or business could be at risk!

Unfortunately the IRS has the authority to seize a taxpayer’s home or business and in fact all it takes for your home or business to be seized is a signature from the IRS district director. The District Director’s power to seize homes and businesses comes from the Internal Revenue Service Restructuring and Reform Act of 1998 (1998 Tax Act) which was extended to U.S. District Court Judges and Magistrates. Although this sounds bad to the tax payer it can actually act as a safety net for taxpayers owing $5,000 or less.


The IRS can seize pretty much everything you have with the only things they cannot take are normally small items which are not of any value. They can resort to enforced collection in the form of levies, seizures and public sale should you not pay the taxes that you owe in time.

The process

IRS-building-e1423746889379There is a specific process in which the IRS must follow before seizing your home or business. Firstly, like vampires, they can only enter your premises with your permission. The IRS needs a signature from you, on a short form, in order to seize your property. Once they have this you can just walk away leaving them your house or business should you choose too. If you do not choose to do this and refuse them entry, the IRS can and will simply apply for a seizure order with a U.S. District Court Judge or Magistrate. If the judge reads the IRS’s request for a seizure order and subsequently approves it, the IRS agents begin preparation to take your property with force and are even allowed to carry weapons. Once the property has been taken over it will be locked up and the assets will be sold to try and reclaim back some of the money you owe.

Don’t let it get this far!

Normally IRS seizures of homes and business are often unnecessary and can sometimes be illegal. Poor communication and arguments between the tax payer and IRS collector can often escalate into this unwanted situation. Generally most people can negotiate their way to a reasonable resolution before such drastic measures are taken.

A tax attorney is the perfect person to seek advice from before the situation gets out of hand. The 1998 Tax Act can allow taxpayers petition for administrative resolutions if they feel that the IRS has acted unreasonably or if there is a dispute over the amount that the IRS states is still outstanding. Again at this point a tax attorney can be priceless in the amount of guidance they will be able to offer here although it is highly advisable to contact one before you have reached this stage of the dispute. A tax attorney has a thorough understanding of tax law, how to deal with IRS agents and can even be your advocate in tax court.

What Are IRS Seizures

If you do not have a tax attorney and want to avoid getting yourself into a sticky situation such as losing your home or business make sure you are up to date with all the in’s and out’s of tax codes and regulations and get official guidance on the IRS website https://www.irs.gov/Tax-Professionals/Tax-Code,-Regulations-and-Official-Guidance.

Read More