Just What Is Asset Seizure, Anyway?

Photo: Jean Scheijen
Photo: Jean Scheijen


The IRS means business when it comes to collecting on a tax debt, especially back taxes. Those horror stories you may have heard about aggressive IRS tactics are partially true. We’ll take a look at what the IRS can and cannot levy (or seize) in terms of your assets, and your available options if you do receive an IRS Notice of Intent To Levy (CP504)

Currently, the IRS can levy any of the following to collect on an outstanding tax debt when all other efforts have failed:

  • Boats, cars, and RVs
  • Second homes, vacation homes
  • Savings and retirement accounts
  • Gold and other fine jewelry
  • Life insurance policies

Wage/Income Garnishment

Typically, if you fall behind on your credit card or loan payments, the creditor can seek a court order before garnishing your wages. The IRS does not have to obtain a court order before garnishing or levying your wages. Even if you aren’t working for wages, the IRS will levy other sources of income:

  • Worker’s Comp
  • Unemployment income
  • Public assistance income

If you are paying court-ordered child support or are receiving Social Security Disability Income (SSDI) those income streams are exempt and will not be levied.

What You Should Do

First and foremost, respond promptly to any IRS notice you receive. Seek out a knowledgeable tax pro who can represent you before the IRS. A qualified tax pro can review your case and determine the best course of action based on your available assets, income and expenses.

Settlement options may include an Offer In Compromise or an Installment Agreement. These payment arrangements take into consideration the following:

  • Your income and household size
  • Rent and utility expense
  • The total value of your assets

If the IRS is able to determine that you do not have the means to pay the tax debt in a lump sum, they can agree to the terms of an installment agreement or Offer In Compromise offered by your tax pro. Likewise, if you are burdened with high costs associated with medical expenses, fuel/transportation, and housing costs relative to your income, the IRS could consider the tax debt noncollectable and place your account on Currently Not Collectible status.

In rare instances the IRS may forgive the tax debt altogether if you are also dealing with any of the following:

  • Unexpected business losses if you’re self-employed
  • Terminal illness
  • Death in your immediate family
  • Divorce or job loss

Regardless of your circumstances, the IRS won’t buy the classic “My dog ate my collection notice” excuse, so contact a qualified tax pro right away to preserve your assets and your sanity. You shouldn’t go it alone when dealing with the IRS.

We have a staff of well-qualified tax attorneys and IRS Enrolled Agents who can represent you before the IRS. They will review your case, determine your eligibility for tax debt relief, and  explain your options. Give us a call today or click on the white “Start Chat” button in the upper right-hand corner of our web pages.

Don’t let the prospect of IRS asset seizure freak you out. Get in touch with us today and get started on the road to peace of mind and options you can live with.

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