What Happens When the IRS Seizes Your Home?

The Internal Revenue Service (IRS) has the legal authority to seize your property and assets if you owe unpaid federal taxes and have failed to respond to their attempts to collect the debt. If this happens, the IRS will typically sell your property and assets at a public auction to collect the unpaid taxes owed. This can be a devastating experience for homeowners or business owners who may not fully understand the process.

The IRS can seize almost any type of property or asset that you own, including real estate, vehicles, bank accounts, retirement accounts, and personal property. However, certain types of clothing, tools, and household items are legally exempt from seizure.

Once the IRS seizes your property, it will be sold at a public auction, which can take some time. The IRS must give notice of the auction and provide an opportunity for interested parties to bid on the property. The IRS or a third-party auctioneer will conduct the sale of the property.

The proceeds from the property sale will be used to pay off your tax debt. If the sale of your property does not cover the entire debt, you will still be responsible for paying the remaining balance. The IRS may also continue to pursue other collection actions, such as wage garnishment or bank levies, to collect the remaining balance.

It's important to note that the sale of your property at a public auction may not result in the best possible price for your property. The sale is typically conducted quickly and may not attract as many potential buyers as a traditional real estate sale. This can result in a lower sale price for your property and may not fully satisfy your tax debt.

If you are facing a tax levy and potential property seizure by the IRS, it is important to take action to resolve the issue before it reaches this point. Negotiating a payment plan or settlement agreement, appealing the levy, or filing for a lien subordination are all options to consider.?

Lien subordination is an option to consider when facing a tax levy and potential property seizure by the IRS. It allows another creditor to move ahead of the IRS in terms of priority for the lien, which means that the other creditor's interest in the property or assets would be considered first before the IRS.

A lien subordination can be a useful option in situations where you need to obtain financing or refinance existing debt. You can obtain more favorable financing terms by considering the other creditor's interest first. This can result in lower interest rates, monthly payments, or other favorable terms.

However, it's important to note that the IRS will still have a claim to the property or assets and may be able to seize them in the future. This means that while lien subordination can be a useful option, it is not a permanent solution to the issue of unpaid tax debts.

To be eligible for a lien subordination, you will need to show that the subordination would be in the best interests of the government and that it would not hinder the government's ability to collect the tax debt. You will also need to provide documentation to show that the subordination will result in the payment of the tax debt.

It's important to work with a qualified tax professional when considering a lien subordination, as the process can be complex and strict requirements must be met. They can help you determine if a lien subordination is a viable option for your situation and guide you through the process.

Working with a qualified tax professional, such as an IRS Enrolled Agent, can help you navigate the complex process of resolving tax debts and avoiding property seizures. We can help you determine the best course of action for your specific situation and guide you through the process.

A property seizure from the IRS is a serious issue that can have lasting consequences for homeowners and business owners. Please don't wait until the IRS takes your property. You can get help now. Schedule a strategy call with our Tax Relief Team.

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