Can IRS come and seize property or inventory of a new business ownerif thepast owner owes back tax money?

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Can IRS come and seize property or inventory of a new business ownerif thepast owner owes back tax money?

A business owner owes the IRS back tax money. They are currently working out a payment plan with the IRS, and are also selling the business.  In such a case, can the IRS come into the business and seize any property or inventory once the sale of the business and inventory is final and new owners take over?

Asked on January 21, 2011 under Bankruptcy Law, Delaware

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Listen, if you are planning on being the "new owner" then I would hold off buying the business unless and until the matter is resolved.  The IRS is a super creditor meaning that they have powers beyond regular creditors.  And how the issue of seizing the business assets is going to effect you kind of depends on their deal with the IRS.  Are they selling the business and turning over the proceeds to pay the lien?  Then there should be some release of the assets of the business within the agreement made with the IRS.  But know that the IRS can seize assets of a business to repay liens by the business owner.  Get legal advice here.  Good luck.


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