The Internal Revenue Service (IRS) is without a doubt the most powerful collection agency in the United States. When a taxpayer owes the IRS money, the IRS can resort to many ways of collecting this money. They can do that in the form of liens, levy, garnishments, and seizures.
IRS seizures are often the worst form of collection by the IRS and is usually done as a last resort if all other methods of collection have proven futile. The IRS can seize almost any of your assets without having to sue you in a civil court or getting a judgment from a court of law. This makes IRS seizures a very powerful tool of debt collection for the agency.
Assets That Can Be Seized By the IRS
There are very few things that the IRS is not allowed to seize from a taxpayer who owes them money and who has not paid off his tax bill in a timely manner. The following is a list of all that the IRS can take away in its seizure operations.
The above list is just an example of what the IRS can seize. This is, by no means, a comprehensive list. The assets that it is prohibited from seizing are normally small assets that have very little value.
Seizure of Homes and Businesses
The Internal Revenue Code has sanctioned the seizure of a defaulting taxpayer's home. The District Director of the IRS is authorized to take away a taxpayer's home with a simple stroke of his pen. The only prohibition being that the house of a taxpayer who owes $5,000 or less cannot be seized. The U.S. District Court Judge or Magistrate also has the power to order the seizure of a taxpayer’s home.
In case of seizing a business, the IRS has to follow certain procedures for seizing the business and selling it through a public sale for a fraction of the true cost. The IRS must first ask the permission of the business owner to enter the premises for shutting down its doors. If you consent to the IRS seizure, you just have to sign a small form and walk away. In case you refuse to grant the permission, the IRS has to apply for an order to seize with a U.S. District Court Judge or Magistrate. This procedure is just a formality as the judge simply examines the legal papers and signs the seizure order. Once this is done, numerous IRS agents, some of them armed, move into your workplace and shut it down. Your business is locked up tight, notices are posted for the public, and the IRS starts arrangements to sell the business to the highest bidder. The only concession you receive is a few minutes to gather your personal effects.
The Reasons behind IRS Seizures
The IRS resorts to seizures in the following circumstances:
Dealing with IRS Seizures
A taxpayer can stop the seizure operations by appealing for a ‘due process hearing’. In this hearing, the taxpayer can raise some questions as to the validity of the seizure and also to the accuracy of the amount owed to the IRS. They can also appeal for other collection methods such as an installment option or an offer-in-compromise settlement. If all this fails, at least the hearing will give you some time in which to pay off your debts.
In any case, it is essential that you have a tax attorney to help you deal with or to stop IRS seizures.
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