Can the IRS Take My Car Away for Back Taxes?

The Internal Revenue Service (IRS) can seize any type of property, including cars, if it deems it necessary to pay off a tax debt. It usually resorts to property seizure in flagrant cases, or when all other efforts to collect a tax debt fail.

Procedure

Seizing your car is not the IRS's immediate response to an overdue tax bill. The IRS investigates its options, including car seizures. The car must have equity to be seized. If the IRS seized the car and sold it at worth, it would have to pay the bank that owns the loan on the car. What is left is what they keep, which is the equity.

Examples

If the car is worth $30,000 and there is a $27,000 loan balance on the car, then the car has a $3,000 equity. In this case, the IRS is not likely to seize the car. However, if you own a $30,000 car outright, it would more likely be seized.

Prevention

Making arrangements to pay down a tax bill may prevent the IRS from seizing your vehicle. It understands the hardships that can occur if it seizes your car. As long as you cooperate, the IRS will work with you.

Solution

The best solution for a tax debt is to get a lawyer who specializes tax situations. The IRS has several avenues you can take, including a taxpayer advocate service. You can also file Form 911--Application for Taxpayer Assistance Order, Form 9423--Collection Appeal, and Form 12153--Application for Collection Due Process Hearing.

References

• Etaxes.com: Seizures
• Internal Revenue Service: Form 911--Application for Taxpayer Assistance Order
• Internal Revenue Service: Form 12153--Application for Collection Due Process Hearing
• Internal Revenue Service: Form 9423--Collection Appeal

Resources

• Internal Revenue Service: Taxpayer Advocate Service
• Attorneypages.com: Tax Attorneys by State