More On Asset Seizures: What Can The IRS Take?

If you neglect to pay your IRS back taxes, your income and assets are at risk of seizure. The IRS will go to extreme measures to collect on debts when taxpayers don’t pay what they owe. If the IRS activates collection actions on your account, it can set you up for tremendous financial hardships. However, there are steps you can take now to pay your back taxes. Before you come to a payment plan, it’s essential to know what assets and income the IRS can legally seize.

What items can the IRS seize to collect on back taxes?

The IRS can seize almost any asset that has equity and that it can sell for cash. To satisfy your tax debt, the IRS can claim anything from expensive jewelry to your retirement investment. Additionally, once the IRS seizes these assets, you most often won’t have a way to reclaim them. The IRS will sell off your assets relatively quickly in an auction that’s open to the public. The money the IRS raises from the sale will satisfy the tax debt the taxpayer owes to the IRS. When seizing your assets, the IRS’ goal is to repay your unpaid debt as quickly as possible.

What assets can the IRS seize?

The IRS is legally able to seize any asset you don’t need for basic survival and shelter. Below is a non-exhaustive list of some of the most common assets the IRS can take and then sell:

–    Vehicles such as boats, RVs, cars, and motorcycles

–    Jewelry, including gold, silver, and other precious metals

–    Property, including second homes and vacation property

–    Retirement accounts

–    Saving accounts and life insurance policies

–    Other government benefits

The IRS does not view the above assets as critical to survival. Therefore, the IRS can seize any of the above assets. Additionally, the above assets have enough equity in them that they can sell them for cash value. The cash the IRS garners from the sale of the asset applies to your back taxes. However, if you owe the IRS less than $5,000, your assets may not be seized. Instead, the IRS will enact other forms of collection, including garnishing your income and seizing federal tax refunds.

Wage Garnishment to Settle Back Taxes

The IRS can also garnish your wages to settle your back taxes. The IRS doesn’t have to go to court to request garnish. Instead, the IRS can start garnishing your wages. Additionally, compared to other creditors, the IRS can take a more significant percentage of your paycheck. The IRS will garnish your wages until you pay back your tax debt in full. Additionally, you can’t quit or stop working to excuse yourself from repaying your tax debt. Only after your account is satisfied will the IRS let up on its collection actions. If you are unemployed, the IRS can find other sources of income to pay off what you owe. The IRS can garnish additional sources of income, including:

–    Money from unemployment

–    Assistance from welfare

– Worker’s compensation income

The IRS cannot legally seize money that you must pay in back child support. Additionally, the IRS cannot claim the money you get from social security or disability payments.

What items is the IRS unable to seize?

The IRS has the right to seize a variety of assets and income sources. However, the IRS cannot legally lay claim to other income sources, especially those you need to survive. For example, the IRS cannot seize your primary residence or the car you use for work. The IRS will not seize assets that can leave your family homeless or without a way to earn income.

Additionally, the IRS cannot seize clothing, tools, or any supplies necessary for work. The IRS also cannot claim furniture valued less than $7,720. Additionally, though they will avoid these measures, the IRS can seize sources of income, including unemployment and welfare. The IRS can also seize up to 15 percent of your Social Security benefits. Lastly, the IRS cannot seize any asset that doesn’t have value.

Can I Prevent IRS Asset Seizures?

You can avoid having the IRS seize your assets. The best way to prevent asset seizure is to file taxes and pay what you owe on time each year. If you cannot pay what you owe in back taxes, you must communicate with the IRS. Additionally, you should consult a tax relief professional who can help you come up with a tax resolution plan. It’s possible you may be eligible for an Installment Agreement. To determine if you qualify for an Installment Agreement, the IRS will consider:

–    How much money you make a year

–    The size of your household

–    Your primary living costs, including rent, utilities, and other expenses

–    The total value of your assets

Based on these figures, the IRS will determine a monthly amount you should be able to pay.

Debt Forgiveness

In some cases, you may be eligible for debt forgiveness. It’s rare for the IRS to forgive your entire debt, but it is possible. You may be able to have your debt forgiven if you experience financial hardships including:

–    Steep medical bills

–    Divorce

–    Death of a family member

–    Terminal illness

–    Loss of job

–    The decline of your business

If you claim these hardships, the IRS will require proof before forgiving your debts.

Get Help From A Tax Relief Professional

Hiring a tax relief specialist can get you a better deal when attempting to pay off back taxes. A tax attorney can help you determine which repayment method is right for you. The tax resolution specialist can also negotiate with the IRS on your behalf and submit the necessary paperwork. Owing back tax debt can leave you in bad financial shape. The IRS only wants to get what money you owe them in back taxes. Often, they are willing to help you settle back taxes, but you have to know how to try. That’s where a tax relief services company can come in handy. When you hire a tax resolution professional, there are other methods you can use to avoid expensive back tax debt. Call Platinum Tax Defenders for a free consultation today.

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