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Taxes and Tax Preparation

Will the IRS take your taxes if your car was repossessed?


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Wiki User
2008-01-17 17:28:59
2008-01-17 17:28:59

No, but if the bank writes off any portion of the loan as a cancelled debt and reports it you on Form 1099-C, then you must include that on your tax return as income. Cancelled debt is taxed as income under the Internal Revenue Code.

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NAKEI, I dont KNOW the answer but I dont see why they would. How would repoing your car give you any income for the IRS to tax?? Is a collector/repo person threatening you?No, the IRS will not take your taxes, on a repossessed vehicle or other property. However, the lender does have various legal options to get money owed them by an individual. This includes the ability to file a claim with the courts to garnish your wages and even your tax refunds.You should check the laws in your state regarding "garnishment" because not all state allow for wage garnishment and that may also affect where your tax refunds can be garnished.

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The IRS can reposses everything-- Even your clothes!!! Technically yes, but it very rarely happens. An IRS lien technically attaches to EVERYTHING you own (even your toothbrush), but that doesn't mean the IRS is going to come take your toothbrush.

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The only way you can have your car repossessed would be to not make any payments. If you have taken out a loan and have not made payments, they will take your car away.

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if i get my car repossessed, can they put a llien on the house?

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Your car was probably repossessed by the lender who owns the car until you pay for it. Call your lender and they will be able to tell you how to locate your repossessed car.


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