Can the IRS Seize and Auction My Property?
Unlike the levy, which involves intangible assets such as your bank account, a seizure is the taking of physical assets, such as your home or car. IRS seizures usually happen in aggravated cases. It happens when someone ignores many requests by the IRS over a long period of time to pay their outstanding taxes.
Don't take an IRS seizure lightly. The IRS will ultimately pursue seizure of your physical assets. Therefore, don't think they won't. Many a newspaper or television show has reported citizens being forced out of their homes after it was sold at an IRS auction.
When the IRS seizes your assets, they want to quickly sell them at auction. They often get less than half your assets value. So they will seize everything you own. Your home, cars, boats, jewelry, motorcycles, insurance polices, and even your retirement funds will be seized. In addition, any future federal tax refunds or state income tax refunds that you're due may be seized and applied to your federal tax liability.
What happens after my property is seized?
If the IRS seizes your house or other property, the IRS will sell your interest in the property and apply the proceeds to your tax debt. Prior to selling your property, the IRS will calculate a minimum bid price. Also, the IRS will provide you with a copy of the calculation. You will have an opportunity to challenge the fair market value determination.
Then the IRS will provide you with the notice of sale and announce the pending sale to the public. After giving public notice, the IRS will generally wait at least 10 days before selling your property. In fact, money from the sale pays for the cost of seizing and selling the property and, finally, your tax debt. If there’s money left over from the sale, the IRS will tell you how to get a refund.
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