IRS Tax Lien vs Property Tax Liens

[Matthew Ford]

It seems that IRS liens can be negotiated down but how would one do this? Property Taxes just have to be paid and that is fairly direct but getting a lien released from the IRS is seeming much more difficult does any one have any experience with this type of situation. Maybe I should move on but I really like the land and opportunity it gives way to if done right.

[Alecia Bolton]

Are you trying to buy the property from the owner and pay off the property taxes, or is it going to tax foreclosure?

If it's going to tax foreclosure, and you win, you can wait 120 days for the IRS to come after you to collect...they usually don't unless it's a very juicy property.  There's also a form you can fill out.

If you're trying to buy it from the owner, that might be different.  I would think that at the closing table, the owner would have to clear the IRS lien with the sale of the property and then come out of pocket.  The following link might have good info, but it's from the standpoint of the person who owes the IRS.

https://www.irs.gov/payments/offer-in-compromise

[John Underwood]

Most IRS liens will just expire after 10 years. They rarely foreclose on a IRS lien. You can also contact them and often settle them for pennies on the dollar.

[Bruce Lynn]

Are you trying to buy the land from an individual seller who has not paid IRS or property taxes?

That's probably the main question.  If YES, then you are probably not going to be able to negotiate the IRS lien.  Seller would need to do that.  I'm guessing if they have not done it already, probably not going to happen.  As for property taxes, I won't say it hasn't ever happened, but I would think on most properties it would be very unlikely to negotiate those to a discount by the original seller.  It's either pay up, or at some point they foreclose.  If it is some kind of big deal like it is an old metal barn eyesore on a downtown city block undergoing revitalization and you're going to build a $10mil apartment building on it, if you can get the land...hey hey maybe the powers that be might negotiate something with you, with perhaps a promise you won't fight value for 10 years or something like that.  If it is brownfield and you're going to clean it up, they might talk.

If it is just kind of a run of the mill deal, I don't think you get any break on taxes.  IRS seller might need to ask for some kind of settlement and compromise or get an a tax attorney to assist in negotiations.

Is the IRS and property tax lien more than you want to pay for the property?

Tell us more.

[Ashish Acharya]

@Matthew Ford IRS tax liens can be negotiated through programs like Offer in Compromise, a payment plan, or requesting a lien discharge if selling the property. You can also apply for lien subordination to allow refinancing or sale. In contrast, property tax liens are non-negotiable and must be paid in full to avoid losing the property. If you like the land, negotiating with the IRS is possible, but property tax liens will need to be settled.

[Matthew Ford]

I think this property is a great site to build a mixed-use space. However, the current owner wants to sell it for more than it is worth so she can make a profit and pay off the IRS lien. The house is falling apart and is an eyesore for the community. I just want to help and build something that is useful. It may not be worth the time I have invested, and I should probably move on.