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Ozzie Gomez - March 15, 2024
Ozzie Gomez Tax debt is stressful enough without the prospect of losing your home. However, if tax debt builds up, there’s a real possibility the IRS may try to seize and sell your property.
Can the IRS take your home, though, and is there any way to stop the process? We answer these questions and more below.
Can the IRS Take Your House?
The short answer is yes. The IRS can “levy” any property, including homes, to collect the tax debt owed to them.
- Property seizure lets the IRS sell your home to pay the tax debt.
- The IRS can’t seize a home without following various procedures which we’ll outline below.
- You may be able to claim a refund if there’s money left over from the sale.
When Can the IRS Seize Your Home?
The IRS can’t seize your home unless:
- You receive a Notice and Demand for Payment due to overdue taxes.
- You don’t pay the tax or respond to negotiate a payment plan.
- The IRS sends a final Notice of Intent to Levy and you fail to respond.
In very rare cases, the IRS can seize your home without following these steps. This is highly unusual, though.
If the IRS contacts you about overdue taxes, don’t ignore the issue. Our tax specialists know how stressful this time is for you, and we’re here to help. Contact us for urgent tax advice and representation.
How Often Does the IRS Seize Property?
There’s no definitive number for how many homes the IRS seizes each year. The good news is, though, that it’s not common for the IRS to seize a primary residence.
The IRS can levy other property, such as bank accounts and cars, instead. This is often more proportionate. Home seizure, even for tax debt, should only be a last resort.
What Happens if the IRS Seizes Your Home?
When the IRS seizes a property, they’ll first calculate a minimum bid price. This is the price they hope to secure for the property when they sell it at auction.
Then, they’ll notify you formally of the intent to sell. Once the property sells, the IRS uses the proceeds to pay:
- The outstanding tax debt
- Legal costs
- Property sale fees
You’ll be advised how to get a refund if there’s money left over after the IRS seizure.
How Long Does it Take the IRS to Seize Property?
The whole process moves fast.
When the IRS issues a final intent to seize, you only have 30 days to respond. If you don’t respond, appeal, or reach an agreement, the IRS seizes the property.
Once the IRS takes possession of your home, they sell it around 10 days later. This is a very short timescale, and once the house is sold, it’s impossible to appeal the decision.
The Innovative Tax Relief understands the need for swift action. We can provide urgent advice if you’re facing IRS seizure.
Can You Get Your Home Back?
Yes. According to the IRS’s own guidance, the IRS must release your home if:
- You have an Installment Agreement which makes the seizure inappropriate
- Releasing the home could help you pay your taxes
- The home’s value is more than the taxes owed, and there’s an alternative way to collect payment
To be clear, you still need to pay the tax debt, even if you get your home back. We can help you negotiate a fair payment plan with the IRS so you can get back on track.
Appeals Process
If the IRS seizes your property, or won’t release your home, you can appeal their decision. Grounds for appealing the intent to seize your home include:
- You can make an alternative payment arrangement
- The IRS did not give you proper notice of the intent to seize your home
- Seizure will cause significant economic hardship
The Office of Appeals will schedule a hearing, or conference. In the meantime, you’re free to try to negotiate a payment plan with the IRS to avoid seizure.
Your hearing is your chance to defend your home. Given how much is at stake, you should seek advice from experienced tax specialists. Our team will gladly support you and help you make a collection appeal.
Appeals Deadline
Is there a deadline for making an appeal? Yes. You must appeal within two years of the notice date. The notice date is the date when you receive notice of seizure.
You can’t appeal once the IRS sells your personal property. That’s why it’s important to act fast. The sooner you contact our team, the easier it may be to stop the IRS from selling your home.
Could a Home Be Exempt From IRS Seizure?
Yes. Homes could be exempt if the tax debt is small, or if there’s possible economic hardship.
Economic Hardship
Homes may be exempt from IRS seizure if seizing the home will cause “economic hardship”. What is economic hardship? The IRS is not specific. However, it generally means being unable to meet basic living expenses due to the IRS seizure.
Small Tax Debts
Legally, the IRS cannot seize your home if you owe less than $5,000 in tax debt. This is because a seizure would be disproportionate to the amount you owe.
Are you concerned about whether the IRS can seize your home? Contact our team for an urgent consultation.
What to Do if You Suspect the IRS May Take Your House
First, do not panic. It’s possible to stop the IRS from seizing property, including your home.
And that’s where Innovative Tax Relief can help. Our experienced team can contact the IRS on your behalf to negotiate a payment plan. Or, we can help you appeal collection action. Whatever IRS issues you have, our team can provide swift assistance.
Don’t let tax debt, levies, or property seizure overwhelm you. Act now and take back control of your finances. Contact our team immediately for a free tax consultation.
