How Does a Tax Foreclosure Work?
If you owe taxes to the government, they can take your home from you by filing a tax foreclosure. This could be devastating to you but you can always save your home from a situation like this.
Owing taxes is not something to mess around with. You should always pay the government taxes that you owe no matter how much they are. If you are in a situation where your taxes are too much and you cannot afford them then you must work with the IRS to pay them off. Work out a payment plan or some way to pay your taxes. If you do not pay your taxes and they add up into the thousands then the IRS will get their money from your property. The IRS can seize any type of asset they want to. They are going to take the asset they0 know they can get the money you owe them from. You might have vehicles you would rather the IRS take. This is usually not an option. If you ignore the IRS, a home is the easiest asset to take and to recover funds.
A tax foreclosure is a process when the IRS comes after a person for unpaid taxes by securing an asset such as your home. The IRS will force your home into foreclosure and sell it at an auction to get the money you owe in taxes. Sometimes the IRS will take other assets as well like vehicles and things. However, a tax foreclosure is very common and it happens all of the time.
A tax foreclosure occurs the same as a foreclosure on a property but usually blindsides the person losing their property. If you are working with the IRS as you should be your lender if you miss payments then they are less likely to take your property. People who avoid the IRS letters and do not remain in communication with them appear as if they don’t care and they aren’t going to pay their taxes.
If your home is forced into a tax foreclosure by the IRS and you want to save it, you can. The only way for you to save a property from tax foreclosure once the IRS has secured it is by coming up with the full amount of money you owe them. Some people will repurchase their property at the auction but this doesn’t always work in their favor.