The Reality of IRS Asset Seizure

Posted on: April 15th, 2010 by

Tax Liens - Accountant - Rockville, MDIf you haven’t paid your taxes, the first thing you can expect to receive are notices in the mail along with instructions explaining your rights.  Many times the issue can be resolved by filing for an installment plan.  If you owe a large balance, however, and refuse to communicate with the IRS, you will eventually face the possibility of having a lien or levy placed on some or all of your property.  A federal lien is a public notice that you owe back taxes and allows the IRS to seize any proceeds from the sale of any real estate.  This prevents you from selling any property with a clean title until the IRS has been paid in full.  Furthermore, the lien follows the property, not the individual, so if someone has the misfortune of buying that property, they will inherit the lien as well and the government now has 2 people to go after.

You can appeal a tax lien by filing a “Collection Appeal Request” and the IRS will determine your case within 5 business days.  You should also contact the IRS right away to try and convince them that a lien will affect your credit and prevent you from getting loans to pay off the debt.  If  you have the unfortunate circumstances of liens placed on several properties, you should do your best to convince the IRS that they should lift the lien on one property so you can sell it and pay off the debt.

If the IRS is unable to recover your unpaid taxes via a lien, they will issue a levy against your assets.  Tax levy notices are generally issued to the employers and financial institutions of the delinquent taxpayer.  Although the IRS has the authority to seize the majority of your assets , they cannot take everything.   They can, however, take your automobile unless you are successful in convincing them that you need your car to get to work so you can continue paying taxes.  They are also able to seize your residence and some retirement accounts, but they usually will only do this as a last resort.  You may also have part of your wages garnished from your paycheck.  You can try to head all of this off by having a specialized accountant or tax attorney (or you can go head to head with the IRS yourself) attempt to make an offer in compromise.



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