What happens after my property is seized?
If the IRS seizes your house or other property, the IRS will sell your interest in the property and apply the proceeds (after the costs of the sale) to your tax debt. Prior to selling your property, the IRS will calculate a minimum bid price. The IRS will also provide you with a copy of the calculation and give you an opportunity to challenge the fair market value determination. The IRS will then provide you with the notice of sale and announce the pending sale to the public, usually through local newspapers or flyers posted in public places. After giving public notice, the IRS will generally wait at least 10 days before selling your property. Money from the sale pays for the cost of seizing and selling the property and, finally, your tax debt. If there’s money left over from the sale after paying off your tax debt, the IRS will tell you how to get a refund.
How do I get my seized property back?
Contact the IRS immediately to resolve your tax liability and request a seizure release. The IRS can also release the seizure if it determines that the seizure is causing an immediate economic hardship. If the IRS denies your request to release the seizure, you may appeal this decision. You may appeal before or after the IRS seizes and sells your vehicle(s), real estate, or other property. After the seizure proceeds have been sent to the IRS, you may file a claim to have them returned to you. If the date of levy/seizure was on or after March 23, 2017, the request must be made before the expiration of 2-years starting from the date of such levy; e.g., if a levy dated March 28, 2017 was received by the person to be served the levy, the request must be made on or before March 27, 2019. You may also appeal the denial by the IRS of your request to have seized property returned to you. For a full explanation of your appeal rights, see Publication 1660, Collection Appeal Rights (PDF).
Please Note: For notices of seizure given to the owner or possessor of property dated on or before March 22, 2017, and notices of levy dated on or before that date, the 2-year deadline described above was 9 months.
The IRS is required to release a seizure if it determines that:
- You paid the amount you owe,
- The period for collection ended prior to the seizure being issued,
- Releasing the seizure will help you pay your taxes,
- You entered into an Installment Agreement and the terms of the agreement do not allow the seizure to continue,
- The seizure creates an economic hardship, meaning the IRS has determined the seizure prevents you from meeting basic, reasonable living expenses, or
- The value of the property is more than the amount owed and releasing the seizure will not hinder our ability to collect the amount owed.
Please note: The release of a seizure does not mean you don’t have to pay the balance due. You must still arrange with the IRS to resolve your tax debt or a seizure may be reissued.
For more information, see Publication 594, The IRS Collection Process (PDF).