Most frequent questions relating to Property seizure:
- What makes IRS to seize the property and how we can stop it?
- What are the different forms of property seizure?
- What procedures are to be followed by IRS to seize the property?
- Is the defaulter has the right to make request for Collection due process hearing?
Internal Revenue Service (IRS) is the most important pillar organization of US federal agency and has been given vast powers by the government. This federal agency deals with enforcement and administration of Treasury’s department revenue laws in the shape of collection and assessment of taxes.
What is Irs Seizure of Property?
If any tax payer neglects, fails or refuse to pay his tax obligation when it become due, Internal Revenue Service (IRS) has the power to seize the property of the defaulter. The seizure of the property by IRS for the satisfaction of the debt is also referred to as levy. If your failure, negligence or refusal to pay taxes is due to some personal reasons beyond your control, you can contact professional tax attorneys to sort out the matter.
Seizure Of Home And Business
IRS powerful strength in tax matters can make it possible for initiating stern action against tax payment defaulters. It has the power to seize your home and business and has the ability to bring you on streets in relation to collection of a debt.
Besides home and business it has the power to seize your vehicles, and any other property although belongs to you, but is in the custody of some other person by way of goodwill on your side.
The IRS may use seizures as a last resort to collect large amounts of back taxes that a person may have owed for many years. In most cases, the amount of back taxes is quickly dwarfed by the amount of penalties levied on top of it. This is because penalties and interest are applied to any unpaid balances each year, and this additional amount can accrue quickly. The penalties are compounded every year, which can make the amount owed grow in a hurry. Seizing property is an extreme measure for the IRS to take to collect back its money, but it’s not rare.
If the IRS does seize a person’s possessions, they can do so without taking that person to court or getting a judgment from the court. Because of this, seizures are a very powerful tool in the collection of taxes and one that taxpayers will do anything to avoid. In a seizure, the IRS is allowed to take possession of a person’s belonging to recoup the amount owed. They will then sell the possessions to redeem the money owed from the taxpayer.
Some of the possessions the IRS may confiscate include all bank accounts, earnings and wages, any federal pensions, any Social Security benefits, the liquidity of any life insurance, personal real estate owned, assets that have been transferred to family or friends, goods such as vehicles or furniture, and any business property or real estate.
Collection Process followed by IRS
If you have an outstanding debt to IRS, in the first instance they will send you notice with attachment of the bill mentioning your outstanding dues, providing you with the opportunity to appeal and to contest the tax levy issued by IRS. Pending tax debts are subjected to penalties and interest. It is important to note that penalties and interests are not applicable in years in which taxpayer is entitled to refund. This is applied to years in which money is owed. If the duration of unpaid balance amount is more, the outstanding debt will also increase. It is important to note that if you are unable to pay the whole amount, you should pay as per your paying capacity to avoid further penalties and growing interest.
It is important to note that if you are unable to pay your outstanding debts by due date, you should contact the concerned wing of IRS to negotiate for compromise ( Offer in compromise ) or you should give them assurance that you will pay the debt on installment basis. It is necessary that you should contact IRS at the earliest and make proper arrangement for the payment of overdue taxes lest they will initiate collection process against you. If you think that it is not possible for you to contact IRS, we will provide you our best services with qualified tax attorneys to negotiate on your behalf with IRS.
In case of your nonpayment in full, you will receive first bill and it is the starting step of collection process. This bill will give you picture in respect of your due balance which is required to be paid in full. This will include interests and penalties added in the unpaid balance since the tax due on your part. Mode of payment of this amount is either through a cheque or money order, which is to be paid to United States Treasury.
It is advisable to you to pay as much as you can on receiving of notice. Your unpaid balance is subjected to penalty in the form of interest which is compounded daily and with monthly late payment penalty. It is therefore advisable to you to pay all your outstanding debts at the earliest to avoid other complexities.
The Seizure Process followed by IRS
The IRS must follow specific procedures for seizing a taxpayer’s home or business. First, they must ask your permission to enter your premises. If you wish to allow the IRS to enter and seize your home or business, you simply sign your name to a short form and walk away. If you refuse to give permission, the IRS will apply for a seizure order with a U.S. District Court Judge or Magistrate. Once the judge has read and approved the IRS’ request for a seizure order, IRS agents prepare to descend upon your property, and may carry weapons. You will be allowed to collect your personal effects. The IRS will then padlock the premises, post notices to the public, and arrange to sell the business assets to the highest bidder.
Irs Cannot Seize Your Property Directly.
It is important to note that IRS cannot seize your property directly, It has to follow different modes, enumerated as below:-
Before seizing the property, it will send ‘Notice of demand of payment’ along with notice of assessment of his pending taxes and demands payment from him.
Tax payer has refused to pay taxes as demanded by IRS, and finally it will issue “Final Notice of Intent to Levy and Notice of Your Right to Hearing” and the same will be either given to defaulter personally, or sent to his last known address through registered post.
To make request for Collection Due Hearing
Defaulter tax payer has been provided with 30 days time for asking IRS official to review the case. He has also been provided opportunity to make request for collection due process hearing with IRS appeals section. If it appears to you that orders passed by IRS in relation to seizure of your property are not legal, you can appeal against the said order. As this process has legal technicalities, you have to consult qualified income tax attorneys to sort out the issue and we will provide you with our best services for related matters.
At this stage you can present your case before IRS as to why it should not initiate any action against you in the form of seizure of your property if it appears to you that IRS has made wrong assessment of tax which you have already paid and owes nothing to IRS.
You can also make your defense on the plea that you have become bankrupt and related proceedings are pending in the competent court of justice or you can also prove before court with strong evidence that your spouse is responsible for tax debt.
After attending collection due process, IRS will give decision in the matter. If you are not satisfied with the decision, you can appeal against the decision with IRS Appeals Office.
What Should You Do Next?
Your personal property is also liable to be seized and thereafter IRS requires you permission to enter at your private areas to seize property. If you refuse, IRS officials will obtain Writ of entry from the law department and proceed further to seize the property available at concerned place. This is not a simple issue and you have to take the help of an IRS tax attorneys in Riverside to sort out the matter for which our company is at your service.
If you receive a notice of levy or seizure of property from the IRS, you should immediately contact the IRS Appeals Office in order to request a Collections Due Process hearing. Remember, if you miss the thirty-day window for filing your appeal, you can lose your right to a hearing. You also should contact your tax professional about any IRS tax levy, so that you can get the assistance that you are likely to need in preparation for your Collections Due Process hearing.
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