The IRS has the authority to take your funds or property if you do not pay your taxes. This is commonly referred to as a “seizure.” Our Tax Code and the IRS’s Internal Revenue Manual provide specific rules and procedures the IRS has to follow to seize your property. Here are the four primary rules the IRS has to follow when seizing your property.
The IRS Must Provide You With Notice of the Right to a Hearing
The IRS is required to notify you in writing of your right to a hearing before the property is seized.
The notice is required for all the taxable periods to which the unpaid tax relates. The IRS is also required to wait 30 days after the date of this notice before seizing your property.
To satisfy this rule, the IRS’s Internal Revenue Manual requires that a Letter 1058, Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing, be provided to you at least 30 calendar days before the seizure. This must be provided to you for each tax year.
The IRS Must Provide You With a Correct Notice of Seizure
The IRS is required to provide you with a notice in writing that specifies the liability for which the seizure was made and an accounting of the property seized. This notice must be provided to you as practicable after the seizure of property.
This requirement is satisfied by providing you with a complete Form 2433, Notice of Seizure. The IRS’s Internal Revenue Manual specifies how the IRS is to complete the form. It requires that:
- The liability shown on Form 2433 agree with the total amount due for the tax modules listed on Form 668-B. This amount has to include all accruals and matches the Total Amount Due on Form 668-B. If there is a difference in amount, the IRS’s Internal Revenue Manual indicates that it should be documented in the IRS’s case history.
- The items of property seized are described and identified with reasonable certainty in an inventory listed on Form 2433 or in an attachment to Form 2433.
The IRS Must Advertise the Sale of Your Property
The IRS is required to give you notice and publish a notification in a newspaper distributed within the county where the seizure was made. This notice has to be provided to you as soon as practicable after the seizure of property.
If there is no newspaper published or generally circulated in the county, the IRS must post a notice at the post office nearest the place where the seizure is made. The notice must also be posted in not less than two other public places.
The notice must specify the property to be sold and the time, place, manner, and conditions of the sale.
The IRS Must Keep Records of the Sale of Your Property
The IRS is required to keep a record of all sales of seized property.
The record has to include the tax for which the sale was made, the dates of the seizure and sale, the name of the party assessed, all proceedings in making the sale, the amount of expenses, the names of the purchasers, and the date of the deed or certificate of sale of personal property.
The IRS is required to provide you with the record of sale (other than the names of the purchasers), the amount from such sale applied to your liability, and the remaining balance of such liability.
The IRS’s Internal Revenue Manual lists three documents to be retained in the permanent record and to be provided to you to satisfy this requirement. These documents are the Record 21, Record of Seizure and Sale, Form 2434-B, Notice of Encumbrances Against or Interests in Property Offered for Sale, and Letter 3074, Transmittal Letter Providing Balance Remaining on the Account after Application of Proceeds.
If you have received a notice from the IRS please contact us immediately we can help.