Can the IRS take away your home?

Yep, they sure can.

Its pretty rare for the IRS to sell your home. But they do have the right.  They even just released a new memo on the subject.

If you are worried about losing your home to the IRS or Franchise Tax Board (FTB), give one of our tax attorneys a call.  We’ve been helping people for close to 30 years solve their tax problems.

Here’s the IRS memo on taking away, and selling your home

 


                                             Expiration Date: April 18, 2015
                                         Impacted: IRM 5.17.4, 5.17.12, 25.3.2
 
                                                     MEMORANDUM FOR
                                            DIRECTOR, ADVISORY AND INSOLVENCY
                                      DIRECTORS, FIELD COLLECTION AREA OPERATIONS
 
                                                          FROM:
                                                      Rocco Steco,
                                           Acting Director, Collection Policy
                                    (for Dretha Barham, Director, Collection Policy)
 
                                                        SUBJECT:
                                         Reissuance of Principal Residence Suit
                                              Foreclosure Recommendations
 
The purpose of this memorandum is the reissuance of interim guidance as SBSE-05-0414-0032, titled “Principal Residence Suit Foreclosure Recommendations,” originally issued as SBSE-05-0413-035 and dated April 30, 2013. Please disseminate this information to all affected personnel within your organization.
 
This memorandum provides interim guidance on policies and procedures for suits to foreclose the tax lien on the taxpayer’s principal residence. These procedures will be incorporated into Internal Revenue Manual (IRM) 5.17.4.8, IRM 5.17.12.20.2, and IRM 25.3.2.4.5.
 
Background
 
There are two options for enforcing collection against the principal residence of a taxpayer or residence which is owned by the taxpayer but occupied by the taxpayer’s spouse, former spouse, or minor child. These two options cannot be used concurrently. One is a proceeding to obtain a court order allowing administrative seizure of a principal residence under Internal Revenue Code (IRC) section 6334(e)(1). The other is a suit to foreclose the federal tax lien against a principal residence under IRC section 7403. The suit to foreclose is the secondary alternative used only when the seizure remedy is not the optimal solution.
 
The current IRM 5.10.2.19, Judicial Approval for Principal Residence Seizures, provides the instructions for obtaining a court order allowing administrative seizure of a principal residence under IRC section 6334(e)(1). While not explicitly stated, the same considerations apply to suits to foreclose the tax lien on a taxpayer’s principal residence. Additionally, a suit to foreclose should only be pursued when there are no reasonable administrative remedies and hardship issues, as described below, are considered.
 
Procedures
 
Effective immediately, the following case action requirements apply to all recommendations for a suit to foreclose the lien on real property used as the principal residence by the taxpayer or owned by the taxpayer and used as a principal residence by the taxpayer’s spouse, former spouse, or minor children. The following case actions must be taken prior to submitting the suit recommendation to Advisory and with the results of the actions included in the suit recommendation. The revenue officer must:
  
  1) Attempt to personally contact the taxpayer and
  inform them that a suit to foreclose the tax lien
  on the principal residence is the next planned action
  (see IRM 5.10.1.7.2);
  
  2) Attempt to identify the occupants of the principal
  residence (see IRM 5.10.2.19(7));
  
  3) Attempt to discuss administrative remedies with
  the taxpayer (see IRM 5.10.1.3.2’s discussion of
  alternative methods of collection and risk analysis).
  This discussion should include the taxpayer’s potential
  to submit an Offer in Compromise (including an Effective
  Tax Administrative offer or, an offer with consideration
  of special circumstances) as an administrative remedy,
  when appropriate (see IRM 5.8.11);
  
  4) Advise the taxpayer about the Taxpayer Advocate
  Service (TAS), provide Form 911, Request for Taxpayer
  Advocate Service Assistance (And Application for
  Taxpayer Assistance Order)
; and explain its provisions;
  if the taxpayer indicates that the planned foreclosure
  of the principal residence would create a hardship,
  the RO will assist the taxpayer with the preparation
  of Form 911 and should forward the form to the local
  Taxpayer Advocate Service office if the revenue officer
  cannot or will not provide the requested relief (see
  IRM 13.1.7, Taxpayer Advocate Case Processing, for
  other situations that qualify for Taxpayer Advocate
  referral and the appropriate procedures to follow);
  
  5) Include a summary statement in the case history
  (see IRM 5.10.2.18(3)).
 
The body of the suit narrative should contain, along with the information on the taxpayer, information on the occupants of the principal residence including children. Provide the name(s), relationship(s) to the taxpayer, brief history (age, health, etc.), current mailing address of the occupant(s) if it differs from the address of the property being foreclosed and a summary of the administrative remedies considered. If the information is unavailable explain the circumstances why the information was not able to be obtained.
 
If you have any questions, please contact me, or a member of your staff may contact Christine Kalcevic, Senior Program Analyst.
 
cc:
Director, Field Collection
Director, ECS
Director, Collection Policy

Tagged with: , , , , , , , , , , , , , , , , , , ,