The federal government takes unpaid taxes quite seriously. Luckily, Texans who owe a minimum amount in back taxes can usually work out some sort of installment agreement to settle any owed taxes. Even those who owe a large amount of taxes may be able to make an offer in compromise to settle their debt to the Internal Revenue Service (IRS). However, when individuals do not take action to settle what the IRS believes is owed taxes, then the IRS can take action to seize an individual’s property, including their bank accounts, wages, house and other items of personal property.
Fortunately, those who disagree with decisions made by the IRS can pursue an appeal. This includes the decision to seize property. But, in order pursue an IRS appeal, certain steps must be followed.
To start, if the IRS has seized a home, vehicle or other items of personal property with the intent to sell them in satisfaction of the tax debt, then a request to appeal must be filed within 10 business days after an individual receives a notice of intent to seize. There is no such time requirement when other assets are seized.
Once the request is filed, then the IRS Office of Appeals will review the case. If a taxpayer disagrees with the Office of Appeals decision, then the matter can be taken to court.
In order to succeed on appeal of a levy or seizure, a taxpayer must demonstrate that one of a number of circumstances exists. For example, if it can be shown that the IRS failed to follow its collection practices before seizing the property or the property was otherwise illegally seized, then the property may be released back to the taxpayer.
The IRS also should not seize property when settlement options, such as innocent spouse relief or an offer in compromise, are being considered. Even showing that it is in both the individual and the government’s best interests to release the property can be sufficient, such as when the seizure will limit the individual’s ability to repay the full extent of taxes owed.
The IRS wields an enormous amount of power. With the mere stroke of a pen, the government can swoop in and take an individual’s property. To avoid this, those who are facing serious IRS collection tactics should understand their rights.