IRS collection threats: Myth vs. Reality

My clients with IRS collection problem come to me with different ideas about what will happen to them because they did not pay their taxes.  Is the IRS going to show up one day and seize my house?  Levy on my income so I cannot provide for my family?  Shut down my business?  When do [...]

Should Veterans’ disability benefits be included in an IRS installment agreement or compromise?

I received a great question from a reader about whether Veteran’s disability benefits should be included in the value of an IRS installment agreement or offer in compromise.
Although the question is directed to Veterans’ disability benefits, my answer also applies to those with unemployment and workers’ compensation benefits.  Here is the question:
I owe the IRS over $50,000 [...]

Will the IRS take my house? Seize my car?

One of the most common concerns about owing the IRS back taxes is that they will show up one day and take your house or car from you.
No matter what the IRS may tell you or what you may have heard, it is very unlikely the IRS will levy on your house, car or furniture.  The assets [...]

All of it, or just 15% – IRS manual and automated levies on social security benefits

A reader asks the following regarding IRS levies on social security benefits:
What is the difference between an automated federal levy on social security and a manual tax levy, and why does the IRS choose one over the other?
Here is my response:
1.     Automated Levy (15%).  Pursuant to section 6331(h) of the Internal Revenue Code, [...]

Protecting retirement accounts from IRS seizure.

Retirement accounts are considered to be an investment that is protected from creditors.  But here is an interesting question from a reader about a big exception to that rule (yes, it is the IRS): 
Several years ago, I liquidated all of my retirement money to pay for gambling trips to the casinos.  My husband and I [...]

When is the IRS prohibited from taking collection action? Part III

Here are the final five situations to look for when the IRS cannot take collection action:

When the value of the property is protected by exemptions provided by Section 6334 of the Internal Revenue Code.  There is certain property that the IRS cannot take under any circumstance, including your furniture and household goods valued up to [...]

When is the IRS prohibited from taking collection action? Part I.

The list of when the IRS cannot take property is fairly extensive, so I will do this in parts to break it down simply. Here is Part I of when the IRS is prohibited from taking collection action:

When there is insufficient equity in the property.  There must be sufficient net proceeds from the sale to [...]

Can the IRS take my stuff?

In the vast majority of cases, you will not lose any of your stuff to the IRS.  Most clothing and personal household belongings are beyond the scope of the IRS collection power.  Here’s why:
Section 6334(a)(1) of the Internal Revenue Code allows you to keep all of your clothing.  Bear in mind that the tax code [...]

IRS property seizures and auctions for June and July, 2008

The IRS has announced its public auctions of seized taxpayer property for June and July, 2008.  Property being sold includes designer clothing and jewelry in New Jersey, vacant commercial real estate in Cleveland, Ohio and, yes, even the frozen horse semen of three time National Champion Park Stallion MHR Nobility in Fort Collins, Colorado.  
In 2007, the IRS [...]