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Can the IRS Take Your House?

by | Mar 15, 2023 | Banking Law, Consumer Bankruptcy, Latest News, Updike, Tracy L.

Can the IRS take your house? This question is a daunting one, but nonetheless necessary. The short answer is yes, it is possible.

Understanding what situations might cause this to happen is helpful and a great place to start. We’ll explain how to keep this from happening to you and what options you have if you’re unable to pay your taxes on time.

If you require legal assistance, reach out to Mette, Evans & Woodside. We’ll review your case and let you know what options are available to you.

Conditions That May Result in Your House Being Seized

The IRS may take your house if any of the following happens: 

  • The individual fails to pay taxes on time. If you know you’ll be unable to pay taxes on time, make the proper arrangements. This is the most common reason a property is seized.
  • The individual commits tax fraud. This includes actions such as failure to report income, passing personal expenses off as business expenses, falsifying deductions, or any other form of dishonesty during the tax return process.
  • The individual is hiding assets. This includes any property or resource that can generate income.

To summarize, when the time comes to pay taxes, they must be paid, or an arrangement should be made. It must be done within a reasonable window of time and by the given deadline. And, of course, you must be upfront about all your sources of income. Only claim deductions you are truly qualified for.

What If I Cannot Pay My Taxes?

Can the IRS take your house if you’re unable to pay your taxes?

While the IRS can take your house for this reason, there are multiple solutions to consider. Communication with the IRS is crucial here.

Most important to understand – even if you are unable to pay your taxes, file the tax returns on a timely basis. Not only can you be hit with a penalty for not filing, but there are also cases where a filing even a day late (beyond any approved extension) can lead to a determination that the taxes are forever non-dischargeable. File the returns, then work on a resolution for payment.

There may be some lenience available to you. For instance, you could be granted an extension. This will give you extra time to pay. When you accept an extension, you make a promise that you will make payment by the last day afforded to you.

There could also be the opportunity for a payment plan. This means the amount owed will be broken down into smaller bits, which will usually be due monthly. This offers an easier way to pay taxes as opposed to a lump sum.

You may also be able to compromise the tax debt owed. This means you can settle an agreement with the IRS for an amount that is less than initially owed, but manageable for your current circumstances.

Finally, if your tax returns were filed timely and you have made efforts to pay, you may even be able to discharge older taxes owed through bankruptcy.

If your situation has escalated to the point where you fear losing your house or other property, it’s time to get legal advice.

Worried the IRS Will Seize Your House? Contact Us Today

When in doubt about what you need to do to prevent your home from being seized, reach out to a bankruptcy attorney.

Get in touch with us to learn more.