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When Can the IRS Seize Your Assets?

IRS Asset Seizure

The IRS can generally seize your assets when you fail to pay your tax debt and the IRS has sent you the proper notices in the mail.  Even if you owe tax debt and have received these notices, you can still protect assets if you negotiate a resolution to your tax problems.

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Key Insights We Will Discuss:

  1.  Steps the IRS must take before seizing your assets.
  2. Limitations on what the IRS can seize.
  3. Your options for avoiding an IRS seizure.

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The IRS Asset Seizure Process

The IRS needs to do the following things before seizing your assets:

  • First, the tax must be assessed.  This can occur when you file a return or when the IRS sends you a Notice of Deficiency.  Once tax is assessed, your account moves to collections.
  • The IRS will then send you a bill.  It will state how much you owe and give you a deadline for sending payment.
  • Once the deadline passes, you may receive further notices demanding payment.  Your balance will increase each month due to late payment penalties and interest.
  • Finally, the IRS must generally send you a Notice of Intent to Levy and give you 30 days to request a Collection Due Process (CDP) hearing .

If you don’t respond within that 30-day period, the IRS can move forward with the levy and seize your bank account funds, wages, or other assets.

Limitations on IRS Seizures

The IRS can’t seize every type of asset.  Certain assets are exempt from seizure, including unemployment benefits, veterans’ disability benefits, necessary schoolbooks and clothing, and furniture.

The IRS also can’t seize an asset that won’t result in net proceeds to the IRS.  For example, the IRS couldn’t seize an asset if the costs of seizure would cost more than the value of the asset.

Even if an asset is eligible to be seized, you can also try to avoid the seizure by claiming a financial hardship.  However, you need to contact the IRS before the levy occurs and provide proof of the specific financial hardship the levy would cause.

Options for Avoiding IRS Seizures

You can typically avoid an IRS seizure by negotiating a deal before or during a CDP hearing.  The IRS will consider many alternatives to the levy, including:

You can avoid most levies by being proactive and finding the best possible resolution to your tax problems.

Contact an Attorney

To get help with IRS levies or wage garnishments, call Ayar Law at 800-571-7175 to receive free, no-obligation tax advice.

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Executive Summary:

— The IRS must follow certain procedures before seizing a taxpayer’s assets

— You can generally avoid an asset seizure by contacting the IRS and negotiating a deal to pay off or settle your tax debt.

— Contact Ayar Law to get free, no-obligation tax advice 800.571.7175

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Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.