CAN THE IRS TAKE MY TRUCK?
If the Internal Revenue Service has hit you with a tax lien, they have the legal right to take your car and/or your truck. Will they take your truck? The answer is mostly no. Once you have a tax lien from the IRS, they have a legal right to take your assets including vehicles. But just because they have the legal right to do so, does not mean they will. On a very practical level, I have worked with dozens and dozens of IRS Agents on literally thousands of cases and I have never had the IRS seize one of my clients’ vehicles.
So if you are worried that the IRS is going to come along in the middle of the night and put your car on the back of a flatbed truck and take it away, that’s probably an unrealistic fear. I just want to put your mind at rest. This is one of those things where the public’s fear is probably a lot greater than the reality. The reasons are practical. Once the IRS hits you with a tax lien, there are lots of things they can do to collect on that tax lien. Keep in mind, there are over 800 thousand people in this country with tax liens. It is just not practical for the IRS to hire people to go through all of the things necessary to grab your truck (or your car, or for that matter, your motorcycle, boat or RV). Again, it is possible, and I have read of cases where it has actually happened, but that’s usually in situations where the taxpayer is particular combative with the IRS, and the situation is extreme, think out and out fraud. For the usual taxpayer, who simply fell behind and can’t pay what they owe, the IRS is not going to go through the trouble of taking your truck or vehicle. There are too many other things they can do that are easy for them. Most commonly the IRS will at some point attempt to levy your bank accounts or your wages. A big reason for that is because it is easy. The IRS is made up of people, and like most people, they are generally going to pursue the easier route. The IRS can easily find any bank account in your name, and they can easily garnish it (a levy and a garnishment means pretty much the same thing).
It is also easy for them to find out where you work. Once you sign up with a new employer there are forms to fill out. Some of those forms go to the IRS, and the information gets plugged up into their computers. It is very easy for them to find out where you work, even if you are not an employee. If you have your own business, people pay you and send you a 1099 form. It shows how much money they have paid you and they are also required to send the money to the IRS. Again, their computers can find all that information and they can then try and recover what you owe them from your customers.
So to summarize, yes, legally the IRS have the right to seize your personal property if they have filed a tax lien against you. In fact, I have had many, many, clients tell me that IRS personnel threatened them with a seizure. However, I have never had the IRS seize or attempt to seize any of my clients’ cars, trucks, boats, motorcycles, RVs etc.
I have been involved in situations (rarely) where IRS Agents have requested that my client sell vehicles in order to start chipping away at their payroll tax liability. I am making a very important distention here. I am talking about situations where a company owes hundreds of thousands of dollars in payroll tax and they keep getting further and further behind.
In those cases, let’s say for example, a construction company:
The IRS Agent will look at all of the equipment owned by that company and at least consider the possibility that if the company sells some of its construction vehicles it may be able to pay some of the payroll taxes that it owes. However, even in those situations, I have been able to prove to the IRS that they would get more money by allowing the company to stay in business and use its assets to generate profits in the future which could be used to reduce the payroll tax liability.
Len Stauffenger represents taxpayers across the country. For a free consultation, call him at 1-877-349-8297.