Seizure of Property by the IRS
- July 15, 2010
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In most cases, seizure of property by the IRS is undertaken only as a last resort. The IRS will try to work with the taxpayer through an Offer In Compromise, Installment Agreement or even place the taxpayer in Currently Not Collectible status in proper circumstances. However, if the taxpayer refuses to try to work with the IRS on any level, then the Revenue Officer in charge may begin seizure proceedings. The Revenue Officer cannot seize and sell property on his own initiative. It takes a judicial proceeding with proper taxpayer rights safeguards.
Also, the taxpayer must own property that is worth seizing, i.e. property with enough equity for the IRS to be able to obtain a significant portion of the money owed after costs of the seizure and payoff of any mortgages. If a seizure is approved, the property will be sold at auction to the highest bidder after [roper advertisement of the auction. If any funds are left over after payment to the IRS, the taxpayer will be given those funds.
What remedies are available to the taxpayer after the seizure process has begun? One can appeal to the Taxpayer Advocate for relief under the special exception and hardship rules. There is a remedy called the Taxpayer Assistance Order that might help in this situation if the taxpayer qualifies. It keeps disastrous results from happening, such as a taxpayer being displaced from her home with nowhere to go. This appeal is in the form of equitable relief rather than legal relief. Each case will be assessed on an individual basis.
Also, the taxpayer can negotiate with the IRS attorney in charge of the legal proceeding and many times work out a solution. The important thing is for the taxpayer to try to work with the IRS rather than ignore the IRS. Remember that the IRS does not want the property and does not want to go through the expense of selling the property. The Revenue Officer would rather work out a payment arrangement with the taxpayer.