IRS Levied My Business Equipment – Can They Really Do That?
When the IRS Targets Your Business Assets, It’s Serious—But Not Always Legal
Most people associate IRS levies with frozen bank accounts or wage garnishments—but if you operate a business, the IRS can go even further.
Under certain conditions, the IRS can seize and sell business equipment, tools, and vehicles—sometimes with little notice.
In this blog, we explain when the IRS can legally levy business property, what they look for, and how to respond if your tools, vehicles, or inventory have been taken.
Can the IRS Seize Business Property?
Yes. Under IRC §6331, the IRS may levy and seize tangible business assets, including:
- Company vehicles
- Office equipment and computers
- Tools of the trade
- Inventory or merchandise
- Furniture and fixtures
- Machinery or production assets
The IRS typically issues these levies through a Revenue Officer after multiple attempts to collect have failed. Business owners often ask, IRS levied my business rights and options — and knowing those rights quickly can make all the difference.
Is This Common?
Business property seizures are rare, but they happen—especially when:
- A business owes substantial back taxes
- The taxpayer ignored multiple IRS notices
- The business failed to respond to a Final Notice of Intent to Levy
- There’s no installment agreement or settlement in place
- A Revenue Officer determines the business is uncooperative
What Are the IRS’s Limitations?
Even though the IRS has broad powers, they:
- Must provide written notice before seizing property
- Cannot seize assets that would shut down your entire business, unless you’re considered “egregiously noncompliant”
- May not seize tools that are necessary for survival or employment, under hardship exceptions
- Cannot seize leased property or assets held in another entity’s name
What Happens After a Seizure?
- The IRS tags or removes the item(s)
- You receive a Notice of Seizure
- The IRS may publicly advertise a sale of your property
- After a short holding period, the items are auctioned off
- Proceeds are applied to your tax debt
For many business owners, this process feels just like when IRS seized my bank account — sudden, financially devastating, and overwhelming without professional help.
The IRS may also file a federal lien against any unsold assets or proceeds.
How to Stop a Business Equipment Seizure
Step 1: Contact the IRS Revenue Officer Immediately
Time is everything. The faster you respond, the more likely you are to prevent the seizure or halt it before sale.
Step 2: File an Appeal
Use Form 12153 to request a Collection Due Process (CDP) hearing, if still within 30 days of the Final Notice.
Related: IRS Collection Appeals Program (CAP) vs CDP Hearings – What’s the Difference?
Step 3: Request a Release Based on Hardship
If the seizure threatens the viability of your business, you may qualify for:
- Hardship-based release
- Currently Not Collectible status
- An Installment Agreement to pause enforcement
Taxpayers often ask, can you stop an IRS levy after it starts — and in many cases, the answer is yes, but speed and documentation are critical.
How to Prevent Equipment Seizure Before It Happens
- Respond to all IRS notices
- File missing returns immediately
- Resolve tax debt with a formal agreement
- Keep your tax professional involved in IRS correspondence
- Avoid ignoring field visits from a Revenue Officer
For long-term relief, business owners sometimes pursue settling tax debt with an IRS Offer in Compromise to reduce liabilities and protect their company’s future. If you’re also dealing with frozen funds, strategies used in IRS bank account levy in California cases may apply to business accounts as well.
We Help California Business Owners Fight IRS Equipment Seizures
At Boulanger CPA and Consulting PC, we:
- Stop business equipment levies
- File appeals and hardship-based release requests
- Negotiate installment plans or settlements
- Protect business operations and critical assets
For a deeper dive into professional strategies, explore more in Defend What’s Yours or contact our office directly.
📞 Call (657) 218-5700 or request IRS levy help at www.orangecounty.cpa
Frequently Asked Questions
Can the IRS seize my business equipment?
Yes. The IRS can seize and sell business assets such as vehicles, machinery, and tools if you owe back taxes and fail to resolve the debt.
Are there limits to what business property the IRS can take?
Yes. The IRS generally avoids seizing assets necessary for minimal business survival, but in practice, they may still target equipment if balances remain unpaid.
Can the IRS take computers and office tools?
Yes. IRS levies can extend to office equipment and technology, though you may be able to negotiate exemptions if items are essential to earning income.
What happens to equipment seized by the IRS?
Seized property is typically auctioned, and proceeds are applied to your tax debt. Any remaining balance continues to accrue interest and penalties.
Can I get my equipment back after seizure?
Possibly. If you act quickly and pay the balance or set up a resolution, the IRS may release levied property before it is sold.
Does bankruptcy protect business equipment from the IRS?
Bankruptcy can halt IRS seizures temporarily, but whether equipment is protected long-term depends on the chapter filed and case details.
What alternatives exist to avoid equipment seizure?
You can stop seizure by negotiating an installment agreement, submitting an Offer in Compromise, or proving financial hardship under Currently Not Collectible status.
Should I hire a professional if the IRS threatens to seize my business equipment?
Yes. Professional help ensures you take the right steps quickly to protect business-critical property and resolve tax debt efficiently.
📣 About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
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