Tax lien Negotiation w/IRS?

Question

I have a seller whose house we are supposed to buy on Jan 3rd. Our title company just picked up on a tax lien that was from the sellers ex-husband who quitclaimed it to our seller X years ago. The lien is for 75k + and the purchase price is 50k.

Obviously the house is underwater. What options do we have here, if any?

Best Regards,

Marcus Kurth

Obviously the house is underwater. What options do we have here, if any?

Best Regards,

Marcus Kurth

Jason Crowe · Answer

So these forms just need to be turned in?  I havent seen the liens but im being told they are IRS liens found.

Brett Goldsmith · Answer

You'll need to apply for a partial lien release. Typically the IRS will release the lien for $0 if they have no equitable position from the property and reserve right to pursue debtor. You'll need to put together an application and get going on that. It takes about a month or so if you move quickly. At times they want an appraisal too, but you may be able to get buy with a CMA. Look up the 8821 and 14135 forms.

Wayne Brooks · Answer

It’s fairly simple, as long as the seller is willing to give the bulk of the money from the sale to the irs.  Short sales routinely include the irs getting nothing from the sale.  The lien gets released from the house, of course the actual debtor still owes the money. There is a particular form, I forget the #, but you can probably google it up, or the title co. is likely familiar with it.....takes 3-4 weeks after irs receives the proper docs......form, purchase contract, closing statement, etc.

Jake C. · Answer

Not worth the brain damage. Federal liens are a nightmare; not even a tax deed will wipe it out. Run.