IRS Tax Lien Question

6 Replies

I'm looking at purchasing a property here in Tampa, Florida. The owner has 16 properties. An IRS lien was filed in 2011 for $176K. But it was not attached to any property. It was just a general lien against the owner in general. The house would not sell on the open market for more than $70K. We are offering $50K.

I'm assuming if we buy the house, all the money will go to the IRS. Does that sound correct? Would the IRS stop the sale and demand $176K be paid for the house?

The lien attached to every property owned by the debtor in each county where it was recorded. IRS will take the sales proceeds -- or some of them if there is an agreement with the debtor -- and the lien against the other properties will be reduced accordingly.

Sounds like the owner has judgement against him personally but no lien against the property you are buying.  The IRS will not stop the sale.  I don't think you have anything to be concerned about here.

An IRS lien recorded in the county records acts a lien on any property the debtor owns.  The title co., or someone, will have to fill out the appropriate IRS form, submit it, and work out an amount the IRS will accept to release the lien from This one property.  This happens frequently in short sales, where the IRS gets nothing, but still releases the lien from the one property.  You won't possibly be able to get title insurance without this, and you certainly should not buy it otherwise.

Originally posted by @Wayne Brooks :

An IRS lien recorded in the county records acts a lien on any property the debtor owns.  The title co., or someone, will have to fill out the appropriate IRS form, submit it, and work out an amount the IRS will accept to release the lien from This one property.  This happens frequently in short sales, where the IRS gets nothing, but still releases the lien from the one property.  You won't possibly be able to get title insurance without this, and you certainly should not buy it otherwise.

I thought I said that... but you said it better!

Point being federal tax liens NEVER identify the property they are liens against. They act as liens against every property owned by the named debtor in the jurisdiction where recorded. 

You should check with title. Generally I see IRS liens recorded on specific property's and/or all property's the debtor owns. 

IRS typically allows partial lien releases for $0.00 if there is no equity in the property. A partial lien release package will need to be submitted to the IRS once all lien holders are approved. Many people have never had to do this before and time frames need to line up appropriately. 

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