The IRS embraces technology to improve auction efficiency and maximize proceeds from seized taxpayer property.
IRS Updates Rules for Selling Seized Property
On November 4, 2024, the IRS issued updated regulations for selling taxpayer property seized by levy. These changes modernized rules that had not seen significant revisions since 1954. Designed under Code Sec. 6335 and Code Sec. 7805(a), the updates aim to benefit both taxpayers and the public by streamlining processes and leveraging technology.
The updates ensure transparency, flexibility, and improved outcomes for all parties involved. They also reflect the IRS’s commitment to embracing modern solutions to address outdated practices.
What Are the Key Changes?
1. Online Sales Become the Norm
The IRS now allows property to be sold through online auctions or sealed bids. Online sales have several advantages:
- They attract more buyers.
- They often lead to higher bids.
- They reduce IRS resource costs.
In most cases, online sales are considered as taking place in the county where the property was seized. However, when necessary, special orders may allow sales to be conducted from alternative locations to increase efficiency.
2. More Payment Options
The new rules introduce flexibility in how buyers can pay. Different forms of payment are now accepted, which increases accessibility for participants.
3. Grouping Property for Maximum Proceeds
Properties can now be grouped into lots in ways that will generate the highest possible aggregate proceeds. This approach provides a fairer and more effective system for both buyers and the IRS.
4. Clearer Bidding Rules
The regulations now clarify:
- How bids are submitted and withdrawn.
- Deadlines for bid submissions.
- Procedures for reviewing bids.
This clarity helps participants understand the process while ensuring fairness.
5. Improved Employee Assignments
The rules also expand guidelines on how IRS employees are assigned to conduct sales and related tasks. By streamlining these roles, the IRS ensures efficiency in its operations.
Why the Changes Matter
These updates are significant for anyone who might face property seizure due to unpaid taxes or those interested in participating in auctions. By adopting modern technology, the IRS can:
- Increase competition for seized assets.
- Ensure proceeds are maximized for taxpayers.
- Reduce administrative costs.
The flexibility in payment methods and property grouping also makes the process more efficient and accessible.
When Do These Changes Take Effect?
The final regulations apply to all property sales conducted by the IRS starting November 5, 2024.
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