Deceased owed back taxes to the IRS - Executor wishes to sell the property
We are interested in purchasing a house and the owner died back in February, His son is the executor and wants to sell. His father owed the IRS an unknown amount of back taxes. Probate has been opended and the 8 months allowed for creditors to come forward is in month number one. Looking at probate matters on the county website it implies the 8 months is a drop dead time frame for creditors. The IRS may be a different animal and could follow people after the 8 months. Without contacting the IRS would the IRS gain knowledge of the death of the tax payer. If so then they would have claim to the deceased financial assets if any.
If not and the 8 months ends is the IRS out of luck?
The surving son might not contact the IRS even though someone is responsible for sending in the deceased's final return. We don't want the sale price of the home to include the back taxes which are currently unknown. Thanks.
Most Popular Reply
#3 All Forums Contributor
- Investor
- Greer, SC
I would get house under contract based on reduced amount by IRS lien amount which you can find recorded with the register of deeds. Make the closing date after probate incase you need that much time. You can always close early if everyone is ready and agrees.
The executor of the Estate (Personal Representative) can ask the court to allow the sale of the house and proceeds would go into the estate account until probate is finished.
Prior to you closing on the property contact the IRS and see if they will release the lien based on the person they wanted to pay these taxes is deceased. They will usually do this, or you can negotiate for a fraction of what is owed.
Then at closing you will owe less to the IRS or nothing at all.
Join your local Real Estate club so you can learn how to do deals like this more efficiently.
I have bought properties like this with a Quit Claim Deed for cash at a reduced price and then cleared up the IRS lean after the fact.