One of the most stressful issues for a person with considerable federal tax arrears is whether the IRS may seize their home. Many taxpayers’ primary source of wealth is their family house. Furthermore, it is their home, a source of pleasure, joy, and family. The possibility of losing a place entails financial loss and is typically emotionally demanding.
Technically, the law permits the IRS to seize a taxpayer’s house to fulfill tax bills.
However, the IRS finds it challenging to do so. As a consequence, the IRS tends to be pretty limited when it comes to taking dwellings to settle tax arrears.
The IRS may pursue a primary home to recover tax bills via two major channels: judicial permission and foreclosure litigation.
The IRS has the authority to seize your property for back taxes, but they are unlikely to do so.
If your tax return reveals that you owe money to the IRS, you have tax debt. If someone fails not to pay their taxes from the prior year, they will owe those taxes the next year and will typically get a tax bill. Back taxes refer to unpaid taxes from a prior year. If you continue to fail to pay your taxes, the IRS will pursue procedures known as enforced collection actions to retrieve unpaid taxes.
The IRS may seize your personal property as part of a tax levy. A tax levy empowers the IRS to take your salary, bank account funds, and other personal property, including your house.
If you have tax debt, you are considerably more likely to lose your property due to other issues created by tax levies. For example, the IRS typically utilizes levies to deduct money from your paychecks and bank accounts. This may lead to missed mortgage payments, resulting in your mortgage company foreclosing on your house, which is a form of the IRS indirectly seizing your house.
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Can the IRS Seize Your Main Residence?
Because property seizures are time-consuming and expensive, the IRS will first attempt to negotiate with you to make a payment plan for your outstanding taxes. However, if this does not occur and they are unable to can not reach you, assets with more liquidity (the ability to convert to cash the quickest), such as retirement funds, are prioritized for IRS enforced IRS-enforced collections. In case you have not made any payments or offered to settle your past taxes, the IRS may confiscate all of your assets; however, the IRS may seize your principal home if your cash and other liquid assets cannot wholly discharge your tax liability upon liquidation.
What happens if my property is seized?
The IRS will provide you with a copy of the calculation and a chance to contest the fair market value finding. The IRS will next issue you notice of sale and publicize the planned sale, often via local newspapers or fliers displayed in public areas. The IRS will generally wait at least ten days after issuing public notice before selling your property. The sale proceeds cover the costs of seizing and selling the property, similar to your tax liability. The IRS will explain how to seek a refund if money remains from the transaction after paying off your tax liability.
How can I reclaim my confiscated property?
Contact the IRS immediately to satisfy your tax debt and obtain a seizure release. The IRS may release the seizure if it believes it is causing immediate economic hardship. You may appeal if the IRS declines your petition to restore the levy. You may also appeal before or after the IRS confiscates and sells your item(s), real estate, or other property. After the seizure funds have been delivered to the IRS, you may file a claim to have them returned to you.
If the IRS concludes that one of the below, you may see your assets returned:
– You paid your debt.
– The collection period expired before the seizure was issued.
– You signed into an Installment Agreement, and the agreement’s provisions prevent the seizure from continuing.
– The seizure causes economic hardship, which means the IRS has found that the episode prohibits you from meeting essential, reasonable living expenditures, or
– The property is worth more than the amount outstanding, and releasing the seizure will not impair our ability to collect the amount owed.
How Can a Tax Attorney Help Prevent the IRS From Foreclosing on My Home?
An experienced tax attorney, such as those at Ideal Tax. To learn more about their services, visit https://www.idealtax.com/faq/who-qualifies-for-the-irs-fresh-start-program/. They will be able to examine your personal circumstances and advise you on your best alternatives, including negotiating an alternate settlement with the IRS. The taxpayer may accomplish this by submitting a request for a due process hearing to the IRS Collection Due Process Department (CDD) within 30 days after receiving the final notification of a tax garnishment or levy. This appeal hearing is usually set within 60 to 90 days.