Can the IRS Take My Home?

On: November 9, 2018

Yes, but it is really hard, expensive and the IRS really would rather not.

The seizure of a taxpayer’s home or business is authorized by the Internal Revenue Code. The IRS District Director is empowered to take a taxpayer’s home or business with a stroke of his pen. The Internal Revenue Service Restructuring and Reform Act of 1998 (1998 Tax Act) extended the District Director’s privilege to seize homes and businesses to U.S. District Court Judges and Magistrates. The Act provides a safety net for a taxpayer owing $5,000 or less.

The IRS must follow specific procedures for seizing a taxpayer’s home or business. First, they must ask your permission to enter your premises. If you wish to allow the IRS to enter and seize your home or business, you simply sign your name to a short form and walk away. If you refuse to give permission, the IRS will apply for a seizure order with a U.S. District Court Judge or Magistrate. Once the judge has read and approved the IRS’ request for a seizure order, IRS agents prepare to descend upon your property, and may carry weapons. You will be allowed to collect your personal effects. The IRS will then padlock the premises, post notices to the public, and arrange to sell the business assets to the highest bidder.

IRS seizures of homes and businesses are often unnecessary, and sometimes illegal. Seizures can be caused by ill feelings and poor communication between the taxpayer and the IRS collector. Most people who owe taxes are able to negotiate a satisfactory solution with IRS collectors. The 1998 Tax Act brought new avenues of relief for taxpayers, allowing them to petition for administrative resolutions if they feel that the IRS has been overzealous in its collection efforts, or if there is a dispute regarding the amount that the IRS claims is outstanding.