Block on Trump's Asylum Ban Upheld by Supreme Court
Safe deposit boxes can provide individuals with confidence that important documents and valuable or prized possessions will be kept safe from loss, accidental destruction, and theft. However, courts do have the authority to issue an order requiring a bank to freeze, or open, a person's safe deposit box.
When it comes to collecting delinquent unpaid taxes, the IRS has quite a bit of leeway, but cannot act to seize assets without court approval, or other particular circumstances being met. In addition to freezing accounts, levying accounts, garnishing wages, and seizing assets, the IRS can get a court order to freeze and seize or force a sale of the contents of a safe deposit box to satisfy a tax debt or penalty.
When it comes to collecting taxes, the law tends to favor the IRS, and provide them with mechanisms to force tax delinquents to pay. Not much is safe from the taxman.
However, when a court order is issued to open or seize the contents of a safe deposit box, the order must specify exactly what is to be seized. If cash is stored in the safe deposit box, this can be seized directly. If valuable items are being stored, their value may be assessed, and strategically sold off to satisfy the debt.
Unlike normal deposit, checking or savings accounts at a bank, safe deposit boxes are not FDIC insured (though you can purchase private insurance). Typically, a bank will not be able to open a safe deposit box without the consent of the customer, or a court order and a locksmith. Most safe deposit boxes are locked by two keys, one of which is kept by the bank, while the other is kept by the customer only.
However, if a customer defaults on their safe deposit box rental agreement, a bank may be able to open the box and force a sale of the contents in order to recoup their losses. When this occurs, banks are expected to attempt to contact the box holder before the sale in order to notify them of a pending forced sale to give them an opportunity to pay the outstanding debts. After a sale occurs, banks are again required to attempt to contact the box holder to give them any proceeds from the sale that are in excess of the outstanding debts.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.