Businesses that don’t pay their taxes may have their physical assets seized by the IRS. Property seizures only happen in extreme cases, but when they do, they can be devastating for businesses that lose their hard-earned assets.
With some planning and the help of an experienced CPA, businesses can avoid having their physical assets seized by the IRS. If you believe that your business is at risk of having assets seized, get in touch with the Sacramento IRS business seizure accountants that work with Cook CPA Group. The accountants at Cook CPA Group will assist clients with setting up arrangements with the IRS so that they can avoid having their assets seized by the agency.
What the IRS Can and Cannot Seize
If you believe that your Sacramento business is at risk of having its property seized by the IRS, it’s important to know what they are and are not able to seize. The IRS is able to take possession of personal property and real estate. The property can be seized even if it is not in your personal possession, as long as you own it; for example, the IRS can seize a house that you own, even if you do not live there.
If your business has not paid its taxes, the IRS is also able to levy your wages, bank accounts, retirement funds, accounts receivable, and rent from tenants in property you own. The IRS is also able to contact parties with money intended for you and intercept those funds as well.
There are some things that the IRS cannot seize, however. The IRS cannot seize furniture and household items (up to a certain amount), equipment that you need for work, and livestock. Also, they are not able to seize minimum exemption for salaries, unemployment benefits, worker’s compensation benefits, court-ordered child support payments, pension payments, disability payments, and service-connected disability payments.
The Process of IRS Seizures in Sacramento
To seize property from a Sacramento business, the IRS must generally go through a standard process that is intended to adequately notify the people whose property they intend to take. The first step in the property seizure process entails the IRS sending a Notice of Demand for Payment, which is essentially a tax bill.
If you fail to respond to the notice and don’t attempt to set up a payment arrangement, the IRS will then send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. This final notice will be delivered to the last known address of the taxpayer. After the taxpayer received this notice, they will have 30 days to either appeal the notice or make payment arrangements. If you fail to respond, the IRS will be able to seize your assets after 30 days.
There are some exemptions to the normal process that allow the IRS to reduce or skip the usual 30-day wait before seizing property. One of these exemptions is if the IRS believes that the collection of taxes is in jeopardy. Another exemption is when the IRS seizes a state tax refund. Levies to collect the tax debt of federal contractors is also exempt from a 30-day notice from the IRS. Even under these exemptions, the IRS is still required to send notice of the taxpayer’s rights regarding appeals.
After all notices regarding property seizure have been sent, the IRS will send a revenue officer to either your home or place of business. The first thing they will seize is assets that are in public areas, such as a car parked on the street. Then they will request to enter private areas of your home or place of business; they will enter if you consent, and if you don’t consent, then they will get a Writ of Entry — a legal document that allows them to enter your home and seize your property.
What to Do If Your Property is Being Seized
After the IRS seizes your property in Sacramento, they will sell your interest in it, then apply the proceeds to the debt you owe. Prior to selling the property, the IRS will give you notice of the market value determination of the property, along with the opportunity for you to challenge it, followed by a notice that it is for sale. Then, the IRS will wait 10 days before selling the property. If the IRS sells your seized property and there is money left over after the proceeds of the sale are applied to your tax debt, you will receive a refund. In some cases, you will be able to file a claim to have your seized property returned to you after the sale.
In most cases, you will be able to request a Collection Due Process hearing. During this hearing, you will have the opportunity to make a case to the IRS for why your assets should not be seized. If there was a mistake made by the IRS that has led them to seize your property, this will be your opportunity to explain what happened. After your hearing, the Office of Appeals will make a decision about your case.
Sacramento Accountants Available to Help with IRS Seizures
Take action now to avoid having your property seized by the IRS. Use the help of an experienced IRS seizure accountant to pay your taxes properly and avoid having your property seized.