The IRS can collect (garnish) assets such as salaries, bank accounts, Social Security benefits, and retirement income. The IRS can also seize your property (including your car, boat, or real estate) and sell it to satisfy the tax debt. An IRS lien allows for the legal seizure of your property to satisfy a tax debt. You can garnish salaries, deposit money in your bank or other financial account, seize and sell your vehicle (s), real estate and other personal property.
The answer to the first question is “Yes. When you owe back taxes, the IRS can legally request payment by garnishing any property equal to the value of your tax debt. While its seizure powers are extensive, the IRS cannot legally claim the properties and sources of income you need for your family to survive. In the rare event that the IRS uses a tax lien to seize your home, the IRS must follow the collection due process procedures established to protect your rights.
The IRS uses this extraordinary step to collect debts when taxpayers haven't paid what they owe after repeated warnings. Unlike other types of creditors, the IRS can simply start garnishing your salary and even take a higher percentage than other bill collectors allow. Assets that have no value that can be sold for cash should be excluded from seizure by the IRS. Some people think they can avoid IRS notifications sent by certified mail if they don't respond to the door or pick them up at the post office, but they're wrong.
IRS agents are often vilified, but they are also people who are just trying to do their jobs and appreciate being treated with courtesy. This is because when you file for bankruptcy, the court issues an automatic stay requiring that all collection activities be stopped. Depositaries are asked to comply with tax compliance regulations. The IRS asks depositaries (banks, credit unions, savings and loan institutions, and similar institutions) to review and understand the responsibilities associated with processing liens.
You can avoid this by establishing a payment agreement with the IRS or by requesting a forgiveness of the tax debt if you experience certain difficulties. Previously, Karen was manager of the Department of Tax Education and Research and director of Communications at TaxAudit. In fact, even if you're unemployed, the IRS may find other sources of income that you can take advantage of to pay what you owe. In the United States, the IRS normally seizes only a few hundred homes each year due to unpaid taxes.
However, the seizure of a shared home is possible if the spouse, without back taxes, is legally responsible for the other spouse's tax debts.