How Often Does The IRS Seize Property?

If you have a tax debt on your hands, we’re willing to bet your mind is going into overdrive. For instance, you may be thinking about if you could lose your assets due to your debt, as well as whether and how often does the IRS seize property.

While the Internal Revenue Service has the right to take possession of your assets (including your home) through a tax levy, they’ll do it as a last resort. They’re more likely to explore a less damaging collection option, and only then will they consider taking your home. 

Although this happens rarely, it’s still a real possibility and you should learn about the steps you can take to protect yourself against such an event.

Will The IRS Notify You About Seizing Your Property?

Fortunately, a home seizure is not something that will catch you off guard, as you’ll receive multiple notices before the collection starts. The last notice that signifies that the seizure of the property is coming soon is the Notice of Intent to Levy along with the Notice of Your Right to a hearing. 

Upon receiving these notices, you have 30 days to resolve the debt, negotiate a payment plan, or file an appeal. If you miss this deadline, the IRS will have no other choice but to seize your property. 

An exception to this rule is the situation in which the IRS has credible reasons to assume they have to act quickly if they’re to collect the debt, in which case they may seize the property without notifying you.

In addition, if you owe employment tax and you filed a request for a Collection Due Process appeal within the last 24 months, the IRS has the right to seize your home without issuing a warning, owing to the disqualified employment tax levy rule.

When And How Often Does The IRS Seize Property?

As mentioned above, the IRS has the legal authority to seize your property through a tax levy. This allows them to do everything from seizing wages from your paycheck, emptying your bank account, and confiscating personal property such as motor vehicles and real estate. 

They can then sell these assets and use the proceeds to cover your debt. 

Keep in mind that this route is only possible if the following two conditions are met:

1. You owe an amount that exceeds $5000 and you haven’t settled the debt even after being notified multiple times
2. Federal judge has approved and signed the seizure order

But how often does the IRS seize property? According to tax data from 2022, the IRS issued a little over 237,000 levies. Even though this is a large number, there is a higher chance of the IRS placing a lien on your property, rather than outright seizing it.

This is good news, but there are still downsides to a lien too. For example, you won’t be able to sell the property in question or borrow against it. Moreover, if you plan on refinancing the property, you’ll have to ask the IRS for permission.

It’s also worth mentioning that a lien doesn’t completely eliminate the possibility of your home being possessed at a later date. Because the federal tax lien is attached to all your properties, the IRS may foreclose the lien by launching a foreclosure lawsuit.

What Happens If The IRS Takes Your Home

Now that you know how often does the IRS seize property, it doesn’t hurt to familiarize yourself with the process that happens during the worst-case scenario. 

Upon seizing the property, the IRS employees will calculate the bid price that reflects the market value of the home and the price the IRS will accept. This sees to it that the IRS doesn’t sell your home for less than fair value. If you believe their price is incorrect, you’re allowed to provide the IRS with information on the value of the property.

With the minimum bid in place, you’ll receive a notice of the sale and the IRS will post public notices about the home they’re auctioning off. 

Although this may seem as if it comes with a great deal of finality, there are legal options available that may help you get your home back even after it was seized. The IRS is legally required to release a seizure if the following occurs:

• You paid the full amount of your debt
• You set up an installment agreement
• IRS issued the seizure after the collection statute expiration date
• Losing your property would cause undue financial hardship and would prevent you from paying for basic living expenses
• Value of the home exceeds your debt and the IRS has other options of collecting the amount without seizing the asset in question

Can You Release A Levy On Personal Residence?

Just like with a seizure, the IRS is under obligation to release a levy if they didn’t follow proper protocols in the process. This is very complex, and you should have a tax attorney assess whether the IRS broke any rules with their levy. 

For instance, the IRS may release the levy if:

• Levied asset is exempt from seizure
• IRS failed to send notices and seized the property prematurely
• Seizure took place after you declared bankruptcy
• Total costs of seizing and auctioning off the home exceed its market value
• You filed a request/or the request was approved for programs such as Innocent Spouse Relief, an Offer in Compromise, or an Installment Agreement
• You have an ongoing collection due process case with the Tax Court or Office of Appeals

Additionally, even if the IRS followed proper protocols with the lien and foreclosure, they can agree to stop the sale and return the home if you demonstrate that doing so is in the best interest of all the parties involved.

Save Your Home With The Help Of Law Offices Of Mary E. King

You’re now familiar with the basics of IRS liens and levies, and you know how often does the IRS seize property and what you can do to potentially stop it. However, you likely don’t have the legal expertise to do it on your own.

As luck would have it, you don’t need to look far to find a tax attorney who can help you save your home and figure out the best strategy for resolving your debt. The Law Offices of Mary E. King have been serving Florida citizens for close to two decades, and in that time, we helped many individuals bounce back from an IRS catastrophe. 

Don’t lose any time - use our contact form or dial 941-906-7585 to schedule a free consultation so we can get to work on finding a solution to your tax issues. 

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.