If you’re facing outstanding debt with the IRS, you may be looking into options to resolve it. At first, the IRS will simply ask you to pay the back taxes. However, if the amount is significant, you may not be able to afford a one-time payment.
There are other options available. Sometimes, the IRS will accept an offer in compromise, allowing you to settle your debt for less than the full amount owed. For example, you may be able to resolve $100,000 in tax debt by paying $50,000, with the remaining balance forgiven. In other cases, they may offer a long-term repayment plan to help you get back on track.
But you may be worried that the IRS could come after your tangible assets. Is it possible for them to seize your house to satisfy a major tax debt?
They need court approval
Seizing a home is not a common strategy used by the IRS. In most cases, they cannot take your house and will instead explore other financial solutions to help you resolve your debt.
However, in rare cases where the IRS does attempt to seize tangible assets such as real estate, they generally need court approval first. They must demonstrate that there is no realistic way for you to pay the debt. If they believe you will not make any payments or that a payment plan would be ineffective, they may argue that the only option is to seize your assets. If the court agrees, the IRS may have the authority to proceed.
Exploring your options
Dealing with the IRS can be complex, and facing outstanding tax debt is undoubtedly stressful. Be sure to explore all of your legal options to determine the best course of action.