During tax season, most Americans are focused on getting their returns to the IRS by the April 15 deadline. But what happens if you fail to file on time and ignore the IRS' repeated warnings to pay up? Your savings, wages, assets and property may all be subject to seizure by the government -- and when that happens, your belongings will be sold to the highest bidder.
Though this bird was born to fly, it was grounded after its owner failed to pay back taxes. Now, its wings belong to someone else. According to Business Insider, a nearly-new 1976 Beechcraft 58TC-Baron, equipped with a piston turbo engine and carrying less than 6,500 flight hours, went up for auction in Arkansas in 2013 at a starting bid of $30,000 — a steal compared to the aircraft's original $170,750 price tag.
In January, a lucky bidder "became" Darryl Strawberry when he successfully made a $1.3 million bid for the former New York Mets slugger's deferred salary from the 1980s, according to ESPN. The unidentified man will receive a monthly check from the team of $8,891.82 for the next 18 years, which will amount to a total of $2 million. Originally the deferred pay had belonged to Strawberry's ex-wife, but when she filed for bankruptcy the judge ordered that the annuities belonged to the IRS for taxes owed from 1989, 1990, 2003 and 2004.
They say a picture is worth a thousand words, but how much does it go for at auction? Another IRS sale earlier this month was slated to recoup some unpaid back taxes by selling off an Illinois individual's collection of art and antiques, including some Baroque-styled chairs and tables; a Japanese vase; vintage rugs; and needlepoint paintings of Eduard Jean Baptiste and George Washington. Low bids, according to the IRS, were due to start at $9,681.
If someone owes back taxes or other funds to the government, the IRS doesn't stop pursuing the money if the person is deceased — they'll collect it from the decedent's estate or surviving children. "The government is now going through old records to see if it overpaid people on Social Security," said Jake Novak of CNBC. "If it thinks it did, it can now seize the IRS tax refund checks of the children of those people it thinks it overpaid." A Washington Post report notes that in the first quarter of 2014 alone, The Treasury Department managed to collect $1.9 billion in said tax refunds, leaving these next of kin financially weakened because of mistakes they had nothing to do with.
Justin Timberlake would probably prefer that everyone forget about that time in 2003 when he was tricked on TV show "Punk'd" into thinking that his home was being seized, since a house is one of the first pieces of property the Treasury may repossess. Thankfully, there are a number of assets that are exempt from seizure by the IRS:
The IRS also notes that it actually can't seize property unless it expects the net proceeds to help pay off a person's tax debt. But that's where the exemptions end. The biggest components of a person's livelihood, like their earnings, bank account and property, are all fair game for IRS seizure after failure to pay taxes. The lesson? File your taxes honestly and on time, and don't hesitate to seek help if you're in financial trouble and unable to pay them. The agency encourages calling 1-800-829-1040, visiting a local IRS office to speak with a representative in person, or visiting www.irs.gov.