IRS Threatens Thousands of Americans With Property Forfeiture Despite Paid Taxes

The IRS is mailing out "probably thousands" of threatening letters warning taxpayers that their property will be seized for unpaid taxes - even though the government has already received its money, it has been revealed New York Post.

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The frightening situation is yet another setback for an agency that last year made similarly baseless threats to seize state tax refunds to cover allegedly unpaid federal taxes.

The mistake came after House committee chairman Richard Neal, Massachusetts, urged the IRS in August to stop sending out tax evasion notices, as an estimated 12 million postage had accumulated over the summer.

One recent "Final Balance Reminder" reviewed by the publication falsely claims that "we have not received your tax arrears after sending you multiple notices."

“You must pay the balance immediately or we will seize (seize) your property,” the message said. “If you do not make a payment now, we will consider your non-compliance an active choice and you may face a penalty.”

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Official correspondence also contains instructions for collecting the necessary information from past tax returns and making one or more payments directly from a bank account.

E. Martin Davidoff, accountant and attorney who heads the tax dispute resolution department at international accounting firm Prager Metis, said he was aware of colleagues whose clients were the victims of the latest wave of unfounded allegations by the IRS.

“There are probably thousands of them,” he said.

Davidoff also noted that the IRS warnings have taken on a more sinister tone lately.

“They have changed this notice to make it more intimidating over the last year or two,” he said.

In the statement, the IRS almost acknowledged the failure and the fact that it needlessly worried taxpayers who owe nothing to the government.

“The IRS appreciates the patience of taxpayers and their representatives based on the circumstances, and we will work with them to resolve cases as quickly as possible and provide appropriate relief where appropriate,” the statement said. “Taxpayers and tax professionals in this situation should call the toll-free number provided on their notice for assistance.”

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IRS national taxpayers attorney Erin Collins said last week that the agency is still recovering from the effects of the coronavirus pandemic, which has closed all of its offices across the country.

"Last year's filing season was very challenging, and the IRS is still digging into the hole that we dealt with last year," she said during an appearance on C-SPAN.

Collins also said: "Congress used the IRS not only as a tax administrator, but also to help with social programs, including distributing incentive checks and administering a range of loans that are beneficial to individuals."

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