If you’ve been ignoring IRS notices or falling behind on business taxes, you may have heard the word “seizure” thrown around. It sounds extreme — because it is. The IRS has the legal authority to physically take your business assets and sell them to satisfy a tax debt. But before you panic, there’s a lot you need to understand about how this process actually works, what triggers it, and most importantly, what you can do to stop it.
The IRS Doesn’t Just Show Up Overnight
Let’s clear something up right away: the IRS doesn’t seize business assets without warning. In fact, by the time a seizure happens, the business owner has typically received multiple notices over months — sometimes years — and has not responded or made any effort to resolve the debt.
The process usually looks like this:
The IRS first sends a series of collection notices, starting with a simple balance due letter and escalating to a CP504 notice (Final Notice of Intent to Levy). After that, you have the right to request a Collection Due Process (CDP) hearing, which legally pauses collection activity while your case is reviewed. If you ignore that right, or if a resolution isn’t reached, the IRS can move forward with enforcement — and that can include seizing and selling your business assets.
What Business Assets Can the IRS Seize?
Almost anything of value that your business owns is fair game. This includes equipment and machinery, vehicles owned by the business, inventory and merchandise, accounts receivable (money owed to you by customers), business bank accounts, real property such as an office building or warehouse, and even your business’s intellectual property in some cases.
If the IRS determines that seizing and selling your assets is the best way to collect what you owe, they can move forward — and the sale often happens quickly, frequently at auction for far less than the true market value of the assets.
What Happens During a Seizure?
When the IRS executes a seizure, a revenue officer will typically show up at your place of business. They will inventory the assets, post a notice of the seizure, and in many cases physically remove the property or secure it so you can no longer use it. The IRS must give you at least 10 days’ notice before selling the seized assets, during which time you still have options to get them back.
This is also when many business owners realize — too late — that they should have acted sooner. A seizure doesn’t just hurt financially. It can halt operations completely, damage relationships with customers and vendors, and in some cases mean the permanent end of the business.
Can the IRS Seize Everything, Including Assets You Need to Survive?
There are some protections built into the tax code. The IRS is required to leave you with certain exempt assets — things like a minimum amount of clothing, furniture, school books, unemployment benefits, and a portion of your wages. But these protections are geared more toward individuals than businesses. For a business, the IRS has significantly broader authority.
One important note: if a seizure would create an economic hardship — meaning it would prevent you from meeting basic living expenses — you may be able to argue for a temporary halt. But you need to act fast and usually need professional help to make that case effectively.
What Are Your Options If a Seizure Is Imminent?
Here’s the good news: there are almost always options available right up until the moment a seizure actually happens — and sometimes even after.
Request a Collection Due Process (CDP) Hearing. If you haven’t already done this, filing for a CDP hearing immediately stops collection activity, including seizure, while your case is being reviewed. You can use this hearing to propose an installment agreement, an Offer in Compromise, or argue that seizure is inappropriate given your circumstances.
Negotiate a Payment Plan. If you can demonstrate that you’re committed to paying what you owe, the IRS is often willing to set up an installment agreement rather than go through the cost and effort of seizing and selling assets.
Apply for Currently Not Collectible Status. If your business is truly unable to pay right now, you may qualify for Currently Not Collectible (CNC) status, which temporarily suspends all collection activity, including seizures, until your financial situation improves.
File an Offer in Compromise. If the total amount you owe is more than the IRS could realistically expect to collect from you, they may accept a reduced lump-sum settlement through the Offer in Compromise program.
File for Bankruptcy. In extreme cases, business bankruptcy can trigger an automatic stay that halts IRS collection activity, including seizures, while the bankruptcy case is resolved. This is a serious step that requires careful legal consideration.
What If the Seizure Has Already Happened?
Even after a seizure, you’re not necessarily out of options. You have the right to redeem your property by paying the full amount owed before the sale takes place. You can also file a wrongful levy claim if you believe the IRS made an error — for example, if they seized property that doesn’t actually belong to you or your business.
Additionally, if the seizure has caused serious hardship, the IRS Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can intervene on your behalf if normal channels aren’t working.
The Bottom Line
An IRS business asset seizure is one of the most severe collection actions the government can take — but it doesn’t come out of nowhere, and it’s rarely unavoidable if you act in time. The biggest mistake business owners make is ignoring IRS notices and hoping the problem will go away. It won’t. The debt grows with interest and penalties, and eventually the IRS will act.
If you’ve received a notice of intent to levy, a CP504, or you’re already in contact with an IRS revenue officer, now is the time to get professional help. At Brightside Tax Relief, we work with business owners every day who are facing exactly this kind of situation — and we know how to intervene before things go too far.
Don’t wait until there’s a revenue officer at your door. Call us today at 844-638-0800 or visit brightsidetaxrelief.com to talk through your options.
The information in this article is for general educational purposes only and does not constitute legal or tax advice. Every tax situation is unique. Contact a qualified tax professional for guidance specific to your circumstances.
