Yes, if you have an unpaid tax liability to the Internal Revenue Service (IRS) for your federal income taxes, the IRS can use a tax levy to take your property, possibly including your house.
Keep in mind that seizing your property is not something the IRS will do lightly. The IRS understands that taking your property—especially your home—can leave a taxpayer in a difficult situation and that doing so is certainly not popular in the court of public opinion. And the IRS would much prefer to keep taxpayers in the system by working out an arrangement whereby the taxpayer simply pays the tax due. Nevertheless, the IRS does have the power through the Internal Revenue Code to seize property of the taxpayer if it is necessary.
However, you can take steps to prevent unpaid taxes from coming to the point where the IRS has to seize your home, much less any of your other property.
File your returns. If you cannot afford to pay the tax you owe, you may think that you can delay the process or prevent the IRS from knowing that you owe tax by not filing your tax returns. This is simply not the case. When you file your tax return but do not pay the tax you owe, the IRS will start charging you interest on the unpaid tax balance at the rate of .5% per month. However, when you do not file your tax return and you owe tax on that return, the IRS charges you interest on the unpaid tax balance at the rate of 5% per month—ten times the rate if you file and simply do not pay your tax. Therefore, it is in your best interest to file your tax return regardless of your tax situation.
Respond to the IRS. When you do not pay your taxes, the IRS will send you written notification that you have tax due. The IRS simply wants to be sure you know that you owe tax. When you receive a notice from the IRS, you should contact the IRS to begin to work through the process of identifying a way to address your tax liability.
Pay your taxes. Ultimately, you generally will have to pay the tax you owe to the IRS. As noted above, the IRS has the powerful ability to place a levy on your property, and the IRS can collect unpaid taxes for 10 years. Therefore, to minimize your lost time and the amount you will ultimately pay, if you can afford to pay your taxes, it is ideal to simply pay them when they are due. Otherwise, you should work with the IRS to establish a payment plan or submit an offer in compromise to address the tax liability.
How can I obtain assistance from a tax attorney?
By completing the short form below, a tax attorney can begin to provide the assistance you need. The attorney will review your situation free of charge and without further obligation to you. Since this review is also 100% confidential, you have every reason to get help now with your unpaid tax liability.