When you fetch your mail tomorrow, be sure to check that there is no notice from the IRS wedged in with your other bills or letters — disregarding such a notice could end up being extremely detrimental to you.
Of course, if you are up to date with all tax payments for the tax season, this does not apply to you. However, if you do happen to receive a notice from the IRS, it is imperative that you make the necessary payments to the revenue service to save yourself from dealing with the repercussions of having your vehicle repossessed.
Why will the IRS repossess your vehicle?
The Internal Revenue Service, better known as the IRS, is the government body responsible for collecting U.S. federal taxes. Failure to comply to payment obligations and an inability to provide a genuine intention to fulfil these payments and stabilize the situation can result in penalties taken out on the assets — such as the vehicle or other property — of the taxpayer.
If your finances are not in order, the notice to look out for is the “Final Notice of Intent to Seize and their Right to a Hearing.” If you are a recipient of such a notice, it is imperative that you immediately contact the IRS and settle your account. Failure to do so could result in the agency seizing your vehicle as compensation for the outstanding payments.
“Garnishment” is the name given to this penalty, and according to the revenue service, “your wages, money in your bank or other financial account, or your vehicle(s), real estate, and other personal property can be taken and sold.”
What steps does the Internal Revenue Service take before issuing the final notice?
As per the agency, levies to settle delinquent taxes are issued on the authorization of the Internal Revenue Code (IRC).
In order for an embargo to be issues, the agency has asserted that the following requirements be met:
- The IRS determines the tax and sends a bill to the taxpayer.
- The person does not pay his taxes
- IRS sends a Final Notice of Intent to Levy and Your Rights to a Hearing at least 30 days before imposing the penalty
- The IRS sends an advance notice stating that it may contact third parties (such as banks , employers, clients, or accountants) for information about your tax situation.
If the IRS does happen to process a repossession of any of your assets, the seized item will be sold. The proceeds from the sales, along with costs will then be added to the total of unpaid debt owed by the person. The asset, such as vehicles or property, are usually sold by means of an auction.
The agency also shared that, “the IRS may communicate with third parties regarding the determination or collection of your tax liability.”
Before the sale is made, a minimum amount for auction is decided and a copy of this is provided to the taxpayer who can then dispute the amount if they so wish.
Once the minimum ten day waiting period lapses, a notice of sale will be issued and the vehicle or asset will be sold. The agency also explains that “the proceeds from the sale pay off the cost of taking and selling the property, and ultimately, your tax liability.”
Once the debt is settled, any leftover funds from the sale will be refunded to the taxpayer.
In order to avoid a seizure, the IRS states that “you can avoid a levy by filing your returns on time and paying your taxes when they are due . If you want more time to file, you can request an extension.”