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IRS Seizure Methods

Unless you’re very young, you are probably already familiar with the IRS. But just to make sure everyone is on the same page, the Internal Revenue Service is the nation’s tax collection agency. They are the government body that administers the Internal Revenue Code enacted by Congress. As a government body, they are – ostensibly – there to help out US citizens with their taxes and the like, but sometimes their methodology can be very confusing and frustrating. Unclear methodology and a misunderstanding of their rules and regulations could result in making mistakes when it comes to the IRS – mistakes for which you could be penalized. Don’t let this happen to you if you can help it! Sometimes, things happen that are beyond our control, and money problems abound. This can put you on the IRS’s radar, and they can begin to seize your possessions in an attempt to gain back the money they believe they’ve lost from you. Remember, the IRS makes mistakes, too.

IRS Seizure

If you owe taxes and don’t make arrangements with the IRS to pay them or negotiate some other option (which we, at Guardian Tax Law, specialize in), the IRS can seize (take) your property without your consent. The most common “seizures” are bank account levies and wage garnishments. That’s when the IRS takes your wages or the money in your bank account to pay your back taxes for you.

How It Works

The collection of unpaid tax by the Internal Revenue Service (IRS) generally begins with collection notices, after which the case will usually be assigned either to the IRS’s Automated Collection System, their Field Collection, or their Collection Queue. This is the point at which you want to pay attention (if you haven’t been already). This is the period that will allow taxpayers to attempt to come to a compromise with the IRS (see our other blog post about tax debt resolution methods, such as installment agreements, offers in compromise, and other alternatives). However, if – at this point – you’ve still not figured out a compromise with the IRS, the IRS may seek to seize your to satisfy the outstanding tax obligation. Taking a taxpayer’s property for unpaid tax is commonly referred to as a seizure. To put it in basic terms, this means that the IRS can simply take your property in order to collect the money you owe them. To ensure taxpayers’ rights are protected, the IRS Restructuring and Reform Act of 1998 amended the seizure provisions in Internal Revenue Code, but it doesn’t mean you – if you’re required to pay back taxes – are safe from seizure. These provisions govern many aspects of the seizure process, from notification of the taxpayer through the sale or redemption of their property. Again, this Restructuring and Reform Act doesn’t protect you from lawful seizure.

Know Your Rights

When it comes time for the IRS to collect their due, keep in mind that you, as a taxpayer, have a statutory right to a Collection Due Process hearing after you first receive a notice to put a levy on your delinquent account. A levy is different from an outright seizure, but only on the surface. If the IRS goes through with the levy, you will still be forced to relinquish an asset that belongs to you. In the case of a levy, the IRS will gain access to your bank account and use those funds to pay off what you owe. No matter your situation, having to pay back taxes is a terrible state of affairs. If at all possible, you want to avoid this situation so that the IRS doesn’t lawfully gain access to your money and possessions. Of course, it’s always best handle your financial issues long before it reaches the point of seizure. We at Guardian Tax Law are here to help ensure it never reaches that point. If you’re already dealing with a bank levy or wage garnishment, call us right away for a free consultation.