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Can the IRS take your home? Your business? The answer to these questions is "yes". If you owe the IRS and do not pay your tax bill in a timely manner, the IRS is empowered by Congress to undertake enforced collection in the form of levies, seizures and public sale. There is very little that the IRS is prohibited from seizing. The exempt assets are usually confined to small items of minimal value. Yes, the IRS can seize your home and your business but the real question is:

Will the IRS take my home? My business? The seizure of a taxpayer's home is authorized by the Internal Revenue Code. The IRS District Director is empowered to take a taxpayer's home with a stroke of his pen. The 1998 Tax Act did little to change this law except to provide a safety net for a taxpayer owing $5,000 or less. However, the 1998 Act also empowered a U.S. District Court Judge or Magistrate to order the seizure of your home with a stroke of his or her pen.

The IRS must follow specific procedures for seizing a taxpayer's business and selling the business assets at public sale for a fraction of what they are actually worth. The IRS must first ask your permission to enter your business premises for purposes of closing your doors. If you allow the IRS to seize, you simply sign your name to a short form and walk away. If you refuse to give permission, the IRS simply says "thank you" and applies for a seizure order with a U.S. District Court Judge or Magistrate. Usually, the judge simply reads the legal papers and signs the seizure order. The next thing you know, several IRS agents, some of them armed, descend upon your business. You have a matter of minutes to collect your personal effects. The IRS will then padlock your business, post notices to the public and arrange to sell the business assets to the highest bidder.

Why do people lose their homes and their businesses to the IRS?

Most IRS seizures of homes and businesses were unnecessary. They were caused primarily by ill feelings between the taxpayer and the IRS collector. Those ill feelings were primarily caused by the taxpayer's failure to effectively communicate with the IRS. Most people who owe taxes and cannot pay in full can negotiate a satisfactory solution with most IRS collectors. With the 1998 Act brings new avenues of relief through petitions for administrative resolutions if a taxpayer feels that the IRS has been overzealous in its collection efforts or there are problems with the amount that the IRS claims is owed.