If you owe the IRS money, then you may be at risk of them seizing your property or assets. It’s important to learn why your assets are being seized, how you might get them back, and what the laws are surrounding civil asset forfeiture. If your assets have been seized due to unpaid taxes and you’re struggling, then consider contacting a tax attorney for assistance.
Why Are My Assets Being Seized?
Your assets are most likely being seized because you owe money to the IRS. As a result, the IRS has decided to take your real property, personal property, or bank accounts to settle your tax debts.
However, the IRS doesn’t seize property without warning. First, they demand payment from the property owner. If you don’t pay, then they’ll issue you a 30-day notice of the property seizure. If you don’t respond within those 30 days, then the IRS may seize your personal property, real property, or other assets.
How Can I Get My Seized Assets Back?
The IRS may sell your assets or property at fair market value after the property seizure. If you wish to get the property back, then you must contact the IRS at once and settle your tax liability. The IRS may also release forfeited assets if the asset seizures have caused economic hardship.
You generally have two years to appeal to get your seized property back. So, if a levy was issued on May 18th, 2023, then you have until May 18th, 2025 to request that the government return your property to you.
The government may refuse to return property taken in any seizures of your assets. You may appeal this decision with additional details, but note that the IRS typically makes informed decisions.
Can Anyone Other Than the IRS Seize My Property?
Properties shouldn’t be seized by anyone other than the IRS. If the marshals’ service or local police department attempts to seize your property, these are likely not IRS-approved forfeiture actions. The criminal division never handles seizing a person’s property to settle tax debts, so the police or marshals service shouldn’t contact you regarding taxes.
The IRS will also tell you ahead of time if they plan to levy your property, so if anyone says they’re acting on behalf of the IRS and tries to engage in asset forfeiture without forewarning, then they haven’t followed the legal process. Get in contact with an attorney; tax attorneys are familiar with IRS procedures and may be able to help figure out what’s going on.
What Are the Civil Asset Forfeiture Laws, and Can Local Law Enforcement Agencies Take My Property?
You may have heard of civil asset forfeiture laws enforced by local law enforcement agencies. This civil forfeiture is unrelated to property seizure by the IRS to settle tax debts.
Only the IRS can engage in civil asset forfeiture for unpaid taxes, and it’s typically not referred to as civil asset forfeiture. In most cases, you’ll hear of an IRS levy being placed on a property.
What Is a Levy If Not Civil Forfeiture?
If there’s a levy on your property, it means the IRS is legally seizing it to settle your unpaid tax debt. It’s easy to get this mixed up with civil forfeiture done by law enforcement officers for other purposes, but police-handled civil forfeiture or property seizure is another matter related to another area of state and local law enforcement entirely.
When the IRS places a levy on your property, you’ll have forewarning. First, the IRS sends a Notice and Demand for Payment. If you don’t pay your tax debt, you’ll be sent a Final Notice of Intent to Levy 30 days before a levy is placed upon your property.
You’ll also receive a Notice of Your Right to a Hearing, and this should give you plenty of time to get in touch with a tax attorney to help you try and fight the levy being placed upon your property.
During this process, contact comes directly from the IRS. The correspondence never comes from another law enforcement agency or another government agency. It’s only the IRS that can place a levy on your properties and engage in civil forfeiture for unpaid taxes.
Can a Local Law Enforcement Agency Ever Take My Assets on Behalf of IRS?
State and local law enforcement, such as the police, will never levy your property. A levy is not police business.
Local law enforcement agencies, such as your local police department, should never get involved when you’re dealing with the IRS. When the IRS has a claim to your property, settling your tax debt comes above all else. The IRS levy takes precedence over civil forfeiture that’s done for other reasons. and other debt collectors shouldn’t get involved regarding forfeiture.
Seizure and forfeiture of property such as bank accounts, cars, real property, and even real estate is done by IRS agents, not the police or criminal justice department.
Which of My Assets Can the IRS Take?
There are very few assets the IRS cannot seize. If you’re in violation of tax laws, then seizures may involve any of your property, including bank accounts, wages, and retirement benefits.
A person may even have physical property seized. Property that may be taken may include cars, boats, or even real estate. Essentially, anything of value a person owns may be seized by the IRS government agency. If the IRS believes a particular asset will be helpful in settling your tax debt, then the law states they may seize this asset.
Laws also allow the IRS to seize any tax refunds you may be owed. This will also be used to settle your tax liability.
When the IRS proceeds to seize your property, you may see it as unfair and lacking justice. However, the IRS will always act fairly and give you plenty of forewarning about the forfeiture process.
Are Seized Property and Forfeited Funds Always Used to Settle Your Tax Debt?
When a federal government seizing agency takes hold of forfeited funds and property, then what they’ve taken will always be used to settle your tax debt. It’s against the law for the IRS to use your property for any other purpose. Rest assured, any property of yours involved in forfeiture will not be used or accessed by any government department besides the IRS.
If the property involved in forfeiture by the IRS was to be used for settling other debts, then the IRS’s claim takes precedence.
No non-IRS seizing agency will be able to engage in forfeiture actions on behalf of the IRS. All investigation needs and the forfeiture process is handled directly by the IRS, and seizures and forfeiture relate to tax debt and tax debt alone.
How to Prevent Asset Seizure by the IRS
Paying your taxes on time is the simplest way to avoid your real property and other assets being seized by the IRS. The IRS almost always has the right to seize assets if you don’t pay your taxes on time. The proceeds from selling the assets involved in asset forfeiture may go towards paying off your debt.
There are a couple of circumstances where you may be able to prevent asset forfeiture after you’ve already been notified of any potential seizures. You must get in touch with the IRS immediately if any of the following are true.
You Have No Tax Liability
If the IRS is mistaken, and you’ve already paid the full value of your taxes, then get in touch with the IRS. You may need an attorney to assist you. Seizures and forfeiture are usually unnecessary if you don’t owe the IRS money.
The Statute of Limitations Has Expired
There’s a statute of limitations on every tax year. If the statute has expired, then the IRS may not engage in asset forfeiture to settle the value of your tax debt. Contact an attorney and the IRS if you believe the statute of limitations is up.
You’ll Be Able To Pay Your Taxes if the Asset Forfeiture Doesn’t Happen
If you’ll be able to pay off the value of your tax debt if the IRS stops the asset forfeiture, then you need to let the IRS know immediately. Being able to pay off your tax debt is always a better option than asset forfeiture.
For example, if you intended to sell the property yourself and the proceeds would pay off your tax debt, then that may be a reason for the IRS to stop the forfeiture. If the property involved in the forfeiture was a bank account, and you have the funds in the account to settle your tax debt, then that may be another reason the IRS stops the forfeiture.
You Can’t Meet Your Basic Needs
If the asset seizure creates hardship so bad that you can’t meet your basic needs, then you may appeal the IRS’s decision to engage in asset seizure. You’ll most likely need an attorney to help you appeal the decision regarding asset forfeiture.
Your Tax Liability Is Caused by Identity Theft
If somebody stole your identity, and it led to tax liability in your name, then you need to prove this to the IRS to prevent asset forfeiture. You should also get in touch with the police if you believe your identity has been stolen. You should seek justice for the crime.
You’re Not Responsible for the Taxes
If a current or former spouse is exclusively responsible for the taxes that the IRS believes you owe, then you need to make the IRS aware. Your property should not be seized if it’s a spouse or former spouse that’s entirely responsible for paying off the tax debt.
You may require legal aid if the IRS attempts to engage in asset forfeiture for your unpaid tax debts. Contact Seattle Legal Services, PLLC at 206-536-3152 for assistance, or visit our official site. We may be able to help you find a way to settle your tax debt, avoid asset forfeiture, and seek justice if the forfeiture is happening without reason.