Auction Calendar

The IRS routinely holds auctions for property it has seized from people who didn’t pay taxes. Those property auctions include real estate and personal property. The upcoming properties are listed on the Treasury website. The auctions also contain contact information for the person in charge of the sale. This person will provide more information about the property. Before bidding, do your homework and research the properties. In addition to the aforementioned information, a bidder should be aware of any senior encumbrances on the property. This is important because the auction process does not set aside a mortgage. A mortgage is a lien on a property that takes priority over the federal tax lien. As a result, the sale of a property at an IRS auction does not affect the rights of the mortgage lender.

The Internal Revenue Manual 5.10.5, Sale of Seized Property, contains procedural guidance for conducting auction sales of seized property. It provides guidance for collection employees on activities that occur before and during the auction sales process. In addition, it contains procedures for resolving issues that arise during the auction process. It is intended for use by Property Appraisal and Liquidation Specialists (PALS) and Revenue Officers.

IRS Auctions for Seized Cars

The IRS auctions seized cars and trucks to raise money for unpaid taxes. These properties are usually sold at public or sealed bid auctions, where bids are made in person or online. The highest bidder is awarded the property. The resulting proceeds are used to pay the delinquent tax, interest, and costs associated with seizing and selling the property. The IRS also uses these proceeds to pay for operating and storing the property. The IRS has the authority to sell various property, including automobiles, boats, commercial/industrial equipment, artwork, and patents. The IRS can conduct its own auctions or contract with GSA to hold the auctions. The best way to avoid being seized is to file your taxes and pay what you owe each year. The IRS will rarely take your assets, especially a vehicle unless other methods of collection have been exhausted. However, the IRS may seize your assets if you are in bankruptcy or have no income to pay your tax bill.

IRS Auction Rules

The IRS has certain rules regarding the auction of property. The agency only allows a donor to claim a deduction for the amount paid for an item at a charity auction that is greater than their cost basis in the item. This is referred to as the fair market value. This can be determined by comparing the item to similar items in the same condition sold at other auctions.

Nonprofits may not hold an auction unless they have the proper paperwork in place. They must also file Form 8282, Donee Information Return, with the IRS within three years of the disposition of the donated property. The charity should keep a copy of the return for its records.

It is important that the auction organizers clearly inform bidders of the fair market value of the items they are purchasing. This can be done by listing the FMV on the auction program or on the bid sheets. This will help bidders know how much of their purchase price is deductible.

Another important rule to note is that the auction organizer must not tack on any admission fees or ticket purchases for games of chance, such as raffles or door prizes. These types of fees do not qualify as charitable contributions and are therefore not tax deductible. This includes items such as tickets to events, books, fine art, and tangible property.