Is forfeiture the same as foreclosure in terms of tax law? 5 Answers as of December 03, 2010

I am really behind on my taxes, and the IRS says my property is forfeiture. Does this mean they are going to foreclose my home?

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David Hoines Law
David Hoines Law | David Hoines
It could be.
Answer Applies to: Florida
Replied: 12/3/2010
Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
Forefeiture and foreclosure are two separate legal proceedings. A forfeiture is usually only done when there is an allegation of criminal activity. A foreclosure can be done by the bank lender (mortgagee) or by IRS, if they have a lien filed against the property. If you owe money to IRS, they might have threatened a "seizure" of your property, which is different form a foreclosure or a forefeiture. You should seek a tax attorney to help you negotiate a settlement with IRS.
Answer Applies to: Illinois
Replied: 12/3/2010
Meyer & Yee, LLP
Meyer & Yee, LLP | Kent W. Meyer
The answer is no.
Answer Applies to: California
Replied: 12/2/2010
LT Pepper Law
LT Pepper Law | Luke T. Pepper
Forfeiture is different than foreclosure. Foreclosure is when you don't pay your mortgage whereas forfeiture is when you don't pay your taxes so it is different. The IRS will sell your property to satisfy the debt.
Answer Applies to: Pennsylvania
Replied: 12/2/2010
Givner & Kaye
Givner & Kaye | Bruce Givner
The IRS can ultimately foreclose on your home if you fail to pay taxes. However, that is not what the IRS wants to do. The IRS wants you to pay the tax. So the IRS would prefer to work out a payment plan with you.

A foreclosure has the same income tax consequence as a sale. A forfeiture has the same income tax consequence as a sale.

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Answer Applies to: California
Replied: 12/2/2010
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