OpenJurist

Can the IRS take my house if l owe back taxes?

The IRS can seize just about anything you own-including your home and pension plans. There is a list of items exempt by federal law from IRS seizures, but it is hardly generous, and it doesn't include your residence. Moreover, state homestead-protection laws don't apply to the IRS. With that said, the good news is that the federal Taxpayer Bill of Rights discourages the IRS from taking homes of people who owe back taxes. In addition, the IRS doesn't like the negative publicity generated when it takes a home, unless of course it is the home of a notorious public enemy.

Nevertheless, if the IRS collection division has tried-and failed-to get any cooperation from a tax debtor (for example, if the debtor has not answered correspondence or returned phone calls, or has made threats, lied about income, or hidden assets), the IRS may go after a residence as a last resort. An IRS tax collector can't make the decision on his or her own-it must come from top IRS personnel.

If the IRS lets you know that it plans to take your house, your Congress person may be able to intervene and put some pressure on the IRS to stop the seizure. And if the seizure would add you and your family to the ranks of the homeless, you can plead that the seizure would create a substantial hardship.

In the unhappy event the IRS does seize your home, all may not be lost. The IRS must sell the home at public auction, usually held about 45 days after the seizure. 'Then, the high bidder at auction must wait 180 days to get clear title. In this interim period, you have the right to redeem (buy back) the home by coming up with the bid price plus interest.

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