Homeowners need to know that under certain circumstances, the IRS can legally seize your house without seeking prior judicial approval. In a recent case, the IRS legitimately seized the physical property of a taxpayer while he was serving out his sentence in jail without having obtained any judicial approval beforehand.

CCH (http://intelliconnect.cch.com) reports:

Two-Out-of-Five Years Test Inapplicable to Primary Residence Determination For Residential Seizures

The Office of Chief Counsel clarified that a revenue agent is not required to seek prior judicial approval before seizing a taxpayer’s residence when the taxpayer is serving a lengthy prison sentence and the residence is being rented to an unrelated third party. Under the facts and circumstances test of Reg. §1.121-1(b), a taxpayer’s residence for purposes of Code Sec. 6334 is not determined by the “2-out-of-5 years” test. Because the taxpayer was incarcerated, not living in the residence, renting the residence to an unrelated party, and receiving all correspondence at another address (the prison), the facts and circumstances indicated that the residence was not the taxpayer’s principal residence, despite the fact that he met the “2-out-of-5 years” test. Therefore, it was unnecessary for the revenue agent to seek prior judicial approval of the seizure.

The IRS defines the “two-out-of-five year test” as: “The taxpayer meets the test if he can show that he owned and lived in the property as his principal residence, or main home, for either 24 full months or 730 days during the 5-year period ending on the sale date. Short temporary absences for vacations and other seasonal absences count as periods of use even if the taxpayer rents out the property during the absences.

..The taxpayer can meet the ownership and use tests separately during different 2-year periods. However, both tests must be met during the 5-year period ending on the sale date”(IRS Pub No. 17 (1997) p. 117).

As a taxpayer, it’s important for you to recognize that the IRS is the most aggressive tax collection agency on the planet. It will stop at nothing to get what you owe them–be it through bank levies, asset seizures, or tax liens.

You need to be equipped with the best tax help you can find to fight against these IRS measures. Oftentimes, expert tax advice from a well-qualified tax attorney can help you abate your IRS penalties by a substantial amount. It is always a better strategy to be proactive with your IRS problems than to simply “ignore” them. Make sure that you take control of your financial future–know your rights and get professional tax help to resolve your tax problems before the IRS finds you.

Tax Resolution Services is a team of expert tax attorneys, CPAs, and certified tax resolution specialists. Call 1-866-477-7762 for your free consultation or visit www.taxresolution.com

More Tax Help, IRS News and Tax Relief Tips:

1. Don’t Settle for a Busy Signal if You Need Tax Help: IRS Can Only Service 70% of Taxpayer Phone Calls
2. Release Your IRS Bank Levy: How a Tax Attorney or Certified Tax Resolution Specialist Can Give You an Advantage
3. Retire Your IRS Back Taxes Forever: How Tax Resolution Services Helped Save a Taxpayer $130,000
4. 6 Tips for Hiring a Good Income Tax Attorney or Certified Tax Resolution Specialist
5. Tax Help Options For Overseas Tax Evasion as UBS Pushes For Swiss-US Deal

Tags: bank levies, IRS penalty abatement, Michael Rozbruch, tax attorney, tax expert, tax help, tax liens, tax resolution services, two-out-of-five year test

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