Tax Help: Can The IRS Take My Home?

It is not a secret that the IRS can seize your property if you owe back taxes.  But people always ask a question with regards to their primary residence.  Can the IRS levy my house?  The short answer is, yes.  The question that must follow quickly is, but why?

Let us just speak of some details about seizures of your residence and then answer the “but why.”  To begin with, the IRS cannot take your house if your tax debt is less than $5,000.  Furthermore the IRS cannot summarily levy your house without a court order.  You know that the IRS has such a massive power (they ought not) that they can issue a bank levy or wage garnishment; especially a bank levy without a court order.  This is not the case with regards to your personal residence.  They have to take permission from the court.

Now we come to the question of why would the IRS seize your personal residence?  We should ask the question in a better way; why would anyone let his tax problem fester so long that the IRS seizes his or her property?  If you have good tax representation all along this should not have happened. If you have a good CPA or a tax attorney, you should have been responding to the different circumstances and your tax settlement should have reflected your situation no matter what that situation was.  This is true across the board except in criminal cases.

Let us now discuss what we are saying: we are saying that a tax problem should not have advanced so badly that it causes you to lose your house.  Tax relief should have come way earlier.  We would like to make a statement that we will defend as we progress in this blog.  The statement is (please try to remember this all the time) you cannot have a tax problem without a tax solution.  Every IRS problem has a solution.  Here are the examples:

Mr. Destitute owns a home fully paid for but no cash to pay for his back taxes of $200,000.   Do we have a solution?  The answer is yes.  The solution is possibly Currently-Not-Collectible.

Mr. Destitute number 2 owns a house.  His mortgage equals the fair market value of the house (no equity) and no cash flow to mention to pay his tax debt of $200,000.  There is a solution which may be either an Offer in Compromise or Currently Not Collectible.

Now Mr. or Mrs. Destitute are no longer Destitute and they are making good money every month and have a house paid for.  Again we have a solution for this lady or the gentleman as well.  It is an Installment Agreement.

So, as you see there is a solution for your tax problem if you have asset (house paid) for and no money such as Currently Not collectible.  There is another solution for your IRS problem if you have no equity and no monthly income which may be an Offer in Compromise or Currently Not collectible.  Finally if you have assets and you have money there is always the good old Installment Agreement.

The only exception that bars you from tax relief may be a criminal case where no Offer in compromise, no Currently Not collectible status or Installment Agreement is available to you.