ADOR aggressively pursues unpaid sales tax, use tax, and payroll obligations—particularly from Phoenix-based contractors, retailers, and cash-heavy businesses. Our Arizona tax lawyers defend clients during audits, appeals, and penalty negotiations. We understand how ADOR builds its case and intervene early to reduce assessments or stop liens before they affect your business operations.
Not every tax dispute can be resolved through negotiation. When the IRS or Arizona Department of Revenue refuses to compromise, or when your rights are at risk due to an improper assessment or enforcement action—litigation may be your strongest path forward. At J. David Tax Law, our Phoenix tax attorneys are fully equipped to represent you in court when necessary, including proceedings before the United States Tax Court, Arizona Office of Administrative Hearings, and Maricopa County Superior Court.
Tax litigation requires precision, thorough preparation, and strong legal skill. Without these, a process that might otherwise be resolved within several months can extend into multiple years. We represent clients across Phoenix, Scottsdale, and Glendale in cases involving:
- IRS tax court petitions and appeals
- Disputes over disallowed deductions, penalties, or audit results
- Challenges to Arizona sales tax or payroll tax assessments
- Contested trust fund recovery penalties
- Petitions for review of lien or levy actions
If you’re dealing with serious tax issues such as IRS collections, state audits, wage garnishments, or large back tax liabilities, you’ll want to work with a tax attorney—not just a tax preparer or accountant. A licensed tax attorney can represent you before the IRS, negotiate Offers in Compromise, halt enforcement actions, and even litigate in U.S. Tax Court or Arizona appeals when needed.
Yes. A qualified IRS tax attorney can negotiate directly with the IRS on your behalf to resolve back taxes, stop garnishments, and reduce penalties. At J. David Tax Law, our Phoenix-based IRS defense attorneys handle everything from Offers in Compromise and payment plans to audit appeals—ensuring your rights are protected and your outcome is optimized.
On average, individual tax preparation services in Phoenix cost around $242, with prices typically ranging from $137 to $454, depending on complexity. However, tax advice and legal resolution services—especially involving the IRS or Arizona Department of Revenue—often require more than just filing support. At J. David Tax Law, we offer free consultations and assign only experienced tax attorneys to your case.
What Qualifies as Property Seizure
Under the Internal Revenue Code, the IRS can seize property when taxes go unpaid and no resolution is in place. This is called a levy, which allows the agency to legally take your assets to cover the debt.
A levy is different from a lien. A lien is a legal claim filed against your property, essentially putting creditors on notice. A levy is active enforcement, where the IRS actually takes your property, including cash, wages, or even real estate.
What Triggers IRS Home Seizures
While the IRS has the authority to seize homes, it typically reserves this action for extreme cases. One major trigger is owing a large tax debt, often exceeding $100,000. When a taxpayer ignores repeated IRS notices including balance due letters, warnings of intent to levy, and certified mail communications, the risk increases.
The situation becomes more serious if the taxpayer fails to set up a payment arrangement, such as an installment agreement or Offer in Compromise. Without any communication or attempt to resolve the debt, the IRS may see no other option but to escalate to property seizure.
The Legal Process the IRS Must Follow
• They must send a Final Notice of Intent to Levy (e.g., CP504 or LT11).
• You then have 30 days to request a Collection Due Process (CDP) hearing.
• If you do not act, the IRS may proceed, but for a primary residence, they must get approval from a federal district court.
What Must Happen Before the IRS Can Seize a Home
The IRS cannot simply show up and take your home. There is a strict legal process they must follow, and it begins with a series of formal notices.
First, the IRS will issue a CP14 notice, which is the initial balance due letter informing you of unpaid taxes. If the debt goes unresolved, a CP504 follows; this is the Intent to Levy notice and warns that collection actions like garnishments or property seizure may occur.
Next comes the LT11, also known as the Final Notice of Intent to Levy and Notice of Your Right to a Hearing. This is the most serious warning and gives you 30 days to request a Collection Due Process (CDP) hearing. During this period, the IRS is barred from taking enforcement action unless the deadline passes with no response.
To legally seize a primary residence, the IRS must also:
• Receive written approval from a high-ranking IRS official, such as a District Director
• Obtain a court order from a federal judge
• Demonstrate that all other collection avenues have been exhausted
What Happens After a Home Is Seized?
If the IRS does seize a home which is rare the process doesn’t end there. The agency follows a specific legal path for selling the property and handling any remaining debt or equity.
Auction process
After the IRS takes ownership of a home, it schedules a public auction to sell the property. You’ll receive a notice of sale, typically sent by mail and sometimes published in local newspapers. This gives you time to prepare, respond, or take legal action.
In some cases, homeowners may still have a brief window to redeem the property by paying the tax debt in full, including any interest and penalties. But once the auction is complete, ownership transfers to the highest bidder, and the IRS applies the proceeds to your tax liability.
Will You Be Left with Nothing?
No. The IRS is required by law to leave you with the means to survive. If your home is sold and there’s equity remaining after paying off the tax debt and sale costs, that surplus money goes to you.
More importantly, the IRS cannot leave you completely homeless without legal justification. If you’re able to show that a seizure would cause undue financial hardship for example, making it impossible to afford basic housing the IRS may hold off or explore alternative collection options. Home seizure is serious, but there are protections in place to prevent total financial ruin.
The IRS is Forgiving Millions Each Day. You Could Be Next.
Situations Where the IRS Will Not Take Your Home
Although the IRS has the authority to seize homes in certain cases, there are clear conditions under which they will not move forward with property seizure.
If you’re cooperating with the IRS, even if you haven’t paid in full, they are unlikely to pursue a seizure. Being in a resolution program such as an Installment Agreement, Offer in Compromise (OIC), or Currently Not Collectible (CNC) status significantly reduces the risk. These programs show that you’re actively working to resolve your debt.
Additionally, if your home has little to no equity after mortgages or liens, the IRS often considers it not worth pursuing. They are required to weigh whether the cost of seizure and sale justifies the return.
Seizure is also off the table if taking your home would result in undue economic hardship. According to IRS guidelines and Internal Revenue Manual (IRM) §5.10.1, the agency must consider your ability to maintain basic living standards. If eviction would leave you homeless or unable to care for dependents, they will likely hold back.
Lastly, the IRS typically won’t enforce seizure if:
• You’re in the middle of an appeal or CDP hearing
• You’re complying with the terms of an existing payment agreement
• You’ve recently submitted a resolution request still under review
How to Protect Your Home from IRS Seizure
The IRS rarely takes a home without warning. In nearly all cases, homeowners have multiple chances to stop the process. Here’s how to act before it escalates.
Respond to IRS Notices Immediately
The first step in protecting your home is to never ignore IRS letters. The process often begins with Notice CP14 (balance due), followed by CP504 (Intent to Levy), and finally Letter LT11, which gives you 30 days before enforced collection can begin.
Even if you can’t pay, replying shows good faith and keeps your case from automatic enforcement. Missing these deadlines removes your right to appeal and can fast-track property seizure.
Set Up a Resolution Plan
Once you receive a notice, act quickly by applying for a resolution program. A standard Installment Agreement allows monthly payments over time. If you can’t pay the full amount, a Partial Payment Installment Agreement may be available, letting you pay less than you owe over the collection period.
You can also apply for an Offer in Compromise (OIC) if you qualify; this allows you to settle your tax debt for less based on your financial situation. Each of these options helps delay or stop the IRS from seizing your property.
What Happens If the IRS Seizes a Home?
If the IRS proceeds with seizing your home, it follows a strict legal process, but it’s important to know what comes next.
First, the property is appraised to determine its fair market value. Afterward, the IRS schedules a public auction, where your home is sold to the highest bidder. You will receive advance notice of the sale, including the time and location, typically through mailed notices and a public announcement.
Once sold, the IRS will use the proceeds to cover your tax debt, along with administrative and seizure-related costs. Any surplus funds remaining after your debt is settled will be returned to you. However, you’ll have lost ownership and possession of the property.
In some cases, the IRS may delay or stop the sale under IRC §6343 if you can demonstrate the seizure creates undue hardship, such as leaving you without shelter or threatening your dependents’ well-being. But once the home is seized, your legal options become more limited, especially if no resolution was attempted beforehand.
While rare, home seizures do happen, and they’re nearly always the result of prolonged non-compliance or total silence from the taxpayer. Legal help can make the difference between losing your home and resolving the debt in a manageable way.
Need to Protect Your Home from the IRS? We Can Help.
If you’re worried the IRS could take your home, you’re not alone, but you’re not without options. The sooner you act, the more protection you have. Whether you’ve received a Final Notice of Intent to Levy or just know you owe more than you can pay, you don’t have to face this alone.
At J. David Tax Law®, our attorneys work quickly to stop IRS collections, even in urgent cases. We help clients across all 50 states resolve large tax debts through customized strategies, Installment Agreements, Offers in Compromise, or Hardship Status.
Call (888) 789-5011 now for your free and fully confidential consultation. Let’s protect what matters most, your home, income, and peace of mind.
Conclusion
The IRS does have the legal authority to seize homes, but it’s uncommon and only happens after many warning signs. Seizure usually comes after repeated notices, ignored deadlines, and no attempt to resolve the debt.
If you respond early and explore relief options like payment plans or hardship status, you can stop the process before it escalates. Taking action quickly is the best way to protect your home and avoid forced collection.
