Will the IRS negotiate

3 Replies

I've heard many real estate gurus say that the IRS will negotiate a lien on a property as long as you have been transferred ownership to that property. The example they give usually is that somebody has no equity and is in foreclosure so they Quit claim a deed to you, Then you contact the IRS to have the lien removed or released as long as you  can show there is no substantial equity.

My question is this : Will the IRS work with you as a buyer of a property that has an IRS lien on it if you have NOT been given a deed to it  and don't own it yet? Suppose it is just a general purchase and sale? For example, a house is worth $100 k and the buyer owes $80 k first mortgage and a $30k IRS lien behind it. What choices do you have to make this sale happen? Can you negotiate off that $30 k or even get it reduced ?

I know variations of this question have been asked before but can't find this specific question. Thanks!

Bruce

That is a question for an EA (Enrolled Agent) like @Michael Plaks who can represent clients in front of the IRS. 

I believe the lender holds 1st place with an IRS as 2nd lien. Bank may want to take for less, IRS lien needs to be paid off not sure about interest part. Talk to a RE attorney.


@Bruce M. Yes the IRS will negotiate but don't expect them to and expect that it will be a considerable hassle. my guess is that if you have it under contract they would negotiate with you. Have a contingency in the contract that it is subject to an acceptable negotiation with the IRS.

Be careful what Gurus you listen too. I would absolutely not accept a quit claim deed and take on the liability of owning a property if I didn't know the IRS would do an acceptable deal.  A good rule of thumb is whenever a guru says "Quit Claim Deed" think to yourself "that is probably bad advice."