Dealing with IRS tax problems can be a massive headache, especially when you’re unaware of the whole process. Unfortunately, there are instances where the IRS may need to seize a property to pay for your tax debt or penalties.
When the IRS seizes your home or other properties, what generally happens? Typically, the agency will sell the property and use the earnings to pay for your tax debt, but you’re right; there’s more to that than a simple selling process.
Before they pay for your tax debt, the IRS usually takes the money to pay for the cost of seizing and selling your asset. After that, with the leftovers, that will be used to pay your remaining tax debt. So basically, your property pays for the seizure and sale.
What Process Does the IRS Follow For Seizures?
The seizure process follows three major steps—first, the IRS will send a Notice of Demand for Payment. You should know that this will only happen when you neglect your payment.
The second step is that you’ll receive the notice, and either you choose to ignore it or fail to make necessary arrangements. When you do this, it means that your account becomes delinquent. You should know that even the tiniest debts can be turned over to the IRS and will contact you regarding this.
Finally, when you still have not made payment arrangements, the Final Notice of Intent to Levy and a Notice of Your Right to a Hearing will be delivered to you personally. With that, you’ll have 30 days to appeal and make payment arrangements.
Seeing as IRS tax problems can be complicated, it’s best to seek guidance from tax experts to prevent these issues from happening.
How Does Property Seizure Work?
When the IRS decides to seize your property, the following will happen:
- The revenue officer will come to your home or business;
- The revenue office can take assets sitting in public areas, such as cars parked upfront;
- The revenue officer will request access to private areas of your business and home;
- If you agree, the revenue officer will enter your house or garage and take any asset there;
- Once the IRS seizes your property, they will hang a prominent notice for the public to see;
If you say no to their requests, they can go back to your property with a Writ of Entry and go in to take assets. Afterwhich, they’ll calculate the minimum bid price of the property and set a fair market value.
Once your property and items have been sold, you don’t have to move right away since the new owner will need to file an eviction lawsuit against you in court. This gives you extra time to figure out your next course of action.
Fortunately, the Right of Redemption can give you the right to buy your home back. But you must pay the owner the total bid price and 20 percent annual interest within 180 days of the sale.
The Bottom Line: Prevent the IRS from Seizing Your Property
The only way to avoid this kind of issue is to be tax compliant. Having IRS tax problems can really provide you with unnecessary stress and anxiety, so if you’re having problems with your taxes, it’s best to reach out to tax experts who can help create feasible solutions for your case.
How Can We Help You?
Are you dealing with IRS tax problems? Not to worry—Axiom Tax Resolution Group is here to help.
We are tax resolution services specialists that provide tax solutions to our clients. With our help, we get to create a roadmap and strategy that will help you resolve your tax woes. Learn more about our services today!