Can the IRS take my house?

Advanced Tax Solutions, CPA, PC

By Charles Forsyth and Todd Whalen - November 1, 2018

Many people wonder, “Can the IRS can take your house?” The short answer is yes, they can take your home if they desire to do so. Under §6334(a)(13)(B)(i) of the Internal Revenue Code, the IRS exempts the principal residence of a taxpayer from levy EXCEPT when a judge or magistrate of a district court of the United States approves the levy in writing. One recent case where a judge approved a principal residence levy was the Gower case from the Summer of 2018 United States v. Gower 122 AFTR 2d 2018-5111.

The taxpayer and spouse owed about $150,000 in taxes for the years 2008-2013. After unsuccessfully trying to make arrangements to get a solution for the taxes themselves, the taxpayers had a federal tax lien filed against them. Not too long after the lien, they were visited by an IRS Revenue Officer (the most senior employee of the IRS collections division who works in the field.) After ignoring the Revenue Officer’s requests to get more information and ultimately come to a solution for the taxes, the Revenue Officer submitted a seizure memorandum recommending the IRS commence a civil action seeking approval of a principal residence seizure in the taxpayer’s case.
The moral of the story is do not delay when dealing with the IRS!

BUT!!! Before you panic, please note, before the IRS seizes a house it has to jump through a lot of hoops, including legal processes with their own attorneys.  A house seizure by the Internal Revenue Service really is at the bottom of the IRS’s bag of tricks.  There are a variety of means to avoid an IRS seizure, such as setting up a payment plan, asking the IRS for uncollectable status (a period of time of no collections while you get on your feet), or even a settlement for less money (called an Offer In Compromise).  The IRS would much rather make arrangements for collecting or settling the debt rather than taking your home.  The big takeaway, however, is to NOT ignore the IRS.  If you ignore them, they have incredible powers that you do not want to work against you!  It’s always better to tackle the tax problem head on than to stick your head in the sand.  The ostrich rarely gets a good solution and can even lose its home!  If you need professional help, please call us at 303-753-6040. 
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