After a Notice of Federal Tax Lien has been recorded, the IRS has the legal authority to come onto the premises of your business to seize assets ONLY by two methods:
1. A court order called a Writ of Entry;
2. Your consent.
Once the IRS is legally on the property, the agents pretty much lock it up for their benefit. Even if there are priority creditors whose claims are superior to the IRS’s, the IRS will make such creditors go to court to prove their legal superiority. It is infinitely better to be ready before the team of agents come walking in the door or gate. It is legally possible to limit or even defeat their claim.
If an IRS agent comes to your business and states the intention is to seize any assets, your response should be immediate: Ask to see the Writ of Entry. If they have it, stop talking and let them start their work of tagging and inventorying property. Maybe get a note pad and camera to monitor them. If they do not have a Writ of Entry, DO NOT sign anything! They will ask you to sign forms. They may say things such as “This form acknowledges we are here” or “Please let us help you by signing this form” or some other subterfuge.
If they do not have a Writ of Entry and if you want them out, tell them respectfully to leave the premises. If you wish to talk to them, go ahead but sign nothing.
A case example: IRS seized a business, a furniture manufacturing plant where approximately 200 workers were employed over two shifts, and ordered the employees to leave the premises. The owners and officers of the business called me, and I arrived within a couple of hours as the IRS officers were busy inventorying physical assets and financial assets. After review of the IRS’s documents, I determined the IRS’s team had illegally entered the premises and I respectfully ordered them to leave, subject to arrest as trespassers by the local sheriff because the team had failed to obtain the necessary legal authority to enter. The IRS team left.
Thereafter, secured parties, including banks and equipment lessors, sought to take possession of their secured property such as machinery, other property that was on the premises, and financial assets before the IRS could return. I litigated these matters before both federal and state courts, and I negotiated with the countless claimants to reach a solution that, ultimately, left all parties unhappy but reconciled. The business survived.