February 13, 2008

You Can Lose Your Assets

The inevitability of asset seizure is high if you have problems with the IRS. The bureau can seize your assets if they demand payment. Meaning, if you owe the IRS a lot of back taxes, you may not have a lot left after they are finished taking your properties.

The assets to be seized are determined by the IRS through these 3 factors:

The property required to pay the tax vs. the tax liability
How convenient it is to take and sell the properties
The properties’ value to the taxpayer in question

The IRS will threaten asset seizure hoping that you will choose to dispose of the assets to pay your back taxes. The assets often targeted by the IRS are:

Savings and/or checking accounts in banks
Automobiles, yachts, planes, and other vehicles
Cash value life insurance
Receivables
Stocks and bonds
Wages
Cash for collection
Owned buildings, resort homes, and other real estate
IRAs, Pensions, and Keoghs
Your home

What’s left? The properties that the IRS can’t seize are:

Clothing, with the exception of fur coats and other luxury items

$6,250 worth of fuel, furniture, personal effections, and provisions

Books and tools of trade amounting to $3125

Students’ books

Unemployment benefits

Worker’s compensation

Money from charity

Job training benefits

Mail that was undelivered

Child support mandated by the court

Deposits made to the Special Treasury fund by members of the armed forces and Public Health Service employees assigned to permanent duty outside the U.S.

Some, but not all, disability payments

Minimum exemption amount from other income, salary, and wages

Public assistance payments from welfare or SSI

Obviously, it’s best to avoid inevitable asset seizure. What do you do, though, if you have been served a notice from the IRS? Our company can provide you with proper aid throughout the release process. You’ll have to pay your taxes in full, however, or at least, offer an installment agreement with the IRS, file for bankruptcy as evidence of a hardship, or prove that what was taken was too much for what you owed.

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Filed under Blog by Income Tax Attorney

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