taking the deed with liens...any draw backs?

Foreclosures, Short Sales, Tax Foreclosures
1

hey guys, i have an interesting scenario:

-single family property under contract
-$50k+ in tax liens
-IRS tax lien over $100k

property under contract for $67kand ready to be assigned to an associate. originally the sellers didn’t think the IRS lien was attached to the house and they were going to receive around $10k from the closing. apparently the IRS lien was not released and the IRS requires the sellers to have an appraisal of the property. they don’t want to pay for the appraisal and asked if there was any way around it. i offered to compensate them back at closing.

that said, i’d like to know if this option would make sense…

if i told them they could just assign me the deed and i would take care of the IRS negotiations. i’d like to know the following:

  1. is there any drawback that would hurt my negotiating position?
  2. is there anyway i could be held liable for any of the liens?
  3. would there be any repercussions if i wasn’t able to negotiate the IRS lien off and the tax lien took it back via tax foreclosure?

any feedback appreciated…perhaps even suggestions of what i could offer as a potential solution if you have one

2

This is sort of a back-end way of removing an IRS lien.

Create a note with the seller and foreclose on the note. This works with institutional foreclosures, but I have no idea about private 2nd foreclosures.

The IRS has a time-frame to redeem/release the lien. Find out what it is.

Just because the lien is removed, doesn’t mean the taxpayer is relieved of the obligation. Frankly it would be UNWISE for the seller to allow the property to be paid off without the lien being satisfied.

If you take title, all the negotiating leverage disappears.

Otherwise, try to explain to the IRS how the house isn’t worth what you paid, when you bought it with a lien attached in the first place. Never mind the seller getting money out of the sale, and ‘still’ not paying off the lien.

Somebody’s gonna pay that lien, short of a foreclosure event.

Negotiate the lien, if possible. If not, weigh your options.

Meantime, the fees, interest, and costs continue to mount on the IRS’s unpaid lien, regardless of whom holds title.

3

Javipa…Apparently you know very litle about real estate…your advice wil only cause more problems for this person.

READ CAREFULLY!

Create a note with the seller and foreclose on the note. This works with institutional foreclosures, but I have no idea about private 2nd foreclosures…

HOGWASH…absolutely WILL NOT WORK. The IRS lien is SENIOR and will remain of record and of title.

The IRS has a time-frame to redeem/release the lien. Find out what it is.

IRS Has an automatic 120 day right of redemption…IN ALL CASES.

Just because the lien is removed, doesn’t mean the taxpayer is relieved of the obligation. Frankly it would be UNWISE for the seller to allow the property to be paid off without the lien being satisfied.

This scheme WILL NOT remove ANY liens…they are all SENIOR to it.

If you take title, all the negotiating leverage disappears.

You had none to start with in this deal.

Otherwise, try to explain to the IRS how the house isn’t worth what you paid, when you bought it with a lien attached in the first place. Never mind the seller getting money out of the sale, and ‘still’ not paying off the lien.

When you buy with the lien attached…it is YOUR PROBLEM…not the IRS’s.

Somebody’s gonna pay that lien, short of a foreclosure event.

Foreclosure WILL NOT automatically remove an IRS Lien.

Negotiate the lien, if possible. If not, weigh your options.
You took title subject to…what is there to negotiate?

Meantime, the fees, interest, and costs continue to mount on the IRS’s unpaid lien, regardless of whom holds title.

4

Bill, I’ve been at this real estate thing for at least two weeks. How about you?

You know two things. The IRS lien is superior. The IRS lien is not removed after foreclosure.

I know two things, too. I never said the IRS lien was inferior, or that it was removed in foreclosure.

Perhaps YOU need to READ my posts more carefully, and avoid restating the obvious. ??

5

Javipa, I started on July 1st, 1970…You?

You Posted…“This is sort of a back-end way of removing an IRS lien.”
How does this work??? Doesn’t this mean it will remove the IRS lien??? The key word here is “REMOVING”…pr your post.

NO, that is NOT a mispirnt…July 1st, 1970…is correct.

How could any knowledgeable real estate investor ask the “Question of how long does the IRS have…find out?”

Not meant to be derogatory at all…just that lots of new comers rely on info here.

Incorrect or misleading info is not advantageous to anyone.

6

Bill,

You’re obviously a dabbler, with a messiah complex.

Otherwise your posts wouldn’t start with, “Apparently you know very little about real estate…”

That said, here’s a quote from one of your earlier posts, and I’ll leave it at that.

I am trying to get an understanding of the tax sale process..
GOOD LUCK, I have been doing this for years and years and STILL do not understand some of the things that happen.
7

Bill, I think you misquoted me there. Also, I’d like to add that much of the information shared here has played a huge part of my success.

8

Ryanpal, I have not quoted you.

I posted to show you that the information from Javipa abot removing and IRS Lien was incorrect and would not work.

Glad you have attained a certin amount of. uccess, keep at it, nothing succeds like persistence.

Javipa, Very well spun comments, BOTH taken out of contenxt. I made both in reference to the tax lien/tax deed business.

Indeed there are things that happen in the courts everyday that I still wonder how decision was made.

I have NEVER made a stupid comment like “How long does the IRS have…ask someone.”

I have never made the stupid comment…“A back end way of REMOVING qan IRS Lien.” and then denying making it.

Good Luck guys, say what you please I will waste no more time replying or commenting.

9
Good Luck guys, say what you please I will waste no more time replying or commenting.

Fantastic.

10

First of all, I’m glad you’re done weighing in, any more.

Second, the reason I suggested the foreclosure route is to obtain rights to the title without a straight sale, so that it puts the title holder in position to negotiate with ‘standing’ on the IRS lien.

Without this, the buyer/title holder has no standing in attempting to negotiate a reduction/removal of the IRS lien. Well, I’m a better negotiator than most sellers, and I would rather be the one talking with the IRS.

Meantime, again, I never said foreclosing on the seller would eliminate the IRS lien.

Furthermore, Bill, you would get along better with me, and others you’ve insulted here since 2009, if you simply asked for clarification of other poster’s statements, instead of jumping to conclusions, and stating your unfortunate opinions of those who actually are mistaken, but have the best of intentions.

I’ve read through about fifty of your most recent posts, and found your Messiah complex to be breath-taking.

11

REMOVING… present participle of re·move (Verb)

Verb

1.Take away (something unwanted or unnecessary) from the position it occupies.
2.Take (something) from a place in order to take it to another location.

More info - Merriam-Webster

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re·move (r-mv)
v. re·moved, re·mov·ing, re·moves

v.tr.

  1. To move from a place or position occupied: removed the cups from the table.

  2. To transfer or convey from one place to another: removed the family to Texas.

  3. To take off: removed my boots.

  4. To take away; withdraw: removed the candidate’s name from consideration.

  5. To do away with; eliminate: remove a stain.

  6. To dismiss from an office or position.

v.intr.

  1. To change one’s place of residence or business; move: “In 1751, I removed from the country to the town” (David Hume).

  2. To go away; depart.

  3. To be removable: paint that removes with water.

n.

  1. The act of removing; removal.

  2. Distance or degree of separation or remoteness: “to spill, though at a safe remove, the blood of brave men” (Anthony Burgess).

13

Releasing a Lien
We will issue a Release of the Notice of Federal Tax Lien:

Within 30 days after you satisfy the tax due (including interest and other additions) by paying the debt or by having it adjusted, or
Within 30 days after we accept a bond that you submit, guaranteeing payment of the debt.
In addition, you must pay all fees that a state or other jurisdiction charges to file and release the lien. These fees will be added to the amount you owe. Refer to Publication 1450, Request for Release of Federal Tax Lien.

Usually 10 years after a tax is assessed, a lien releases automatically if we have not filed it again. If we knowingly or negligently do not release a Notice of Federal Tax Lien when it should be released, you may sue the federal government, but not IRS employees, for damages.

Payoff Amount
The full amount of your lien will remain a matter of public record until it is paid in full. However, at any time, you may request an updated lien payoff amount to show the remaining balance due. An IRS employee (either over the toll-free customer service telephone line, or at a walk-in service site, or at your local IRS’ lien desk) can issue you a letter with the current amount due in order to release a lien.

Applying for a Discharge of a Federal Tax Lien
If you are giving up ownership of property, such as when you sell your home, you may apply for a Certificate of Discharge. Each application for a discharge of a tax lien releases the effects of the lien against one piece of property. Note that when certain conditions exist, a third party may also request a Certificate of Discharge. If you’re selling your primary residence, you may apply for a taxpayer relocation expense allowance. Certain conditions and limitations apply. Refer to Publication 783, Instructions on How to Apply for a Certificate of Discharge of Property from the Federal Tax Lien.

Making the IRS Lien Secondary to Another Lien
In some cases, a federal tax lien can be made secondary to another lien. That process is called subordination. Refer to Publication 784, How to Prepare Application for Certificate of Subordination of Federal Tax Lien.

Withdrawing Liens
By law, a filed notice of tax lien can be withdrawn if:

The notice was filed too soon or not according to IRS procedures,
You entered into an installment agreement to pay the debt on the notice of lien (unless the agreement provides otherwise),
Withdrawal will speed collecting the tax, or
Withdrawal would be in your best interest (as determined by the Taxpayer Advocate), and in the best interest of the government.
We will give you a copy of the withdrawal, and if you write to us, we will send a copy to other institutions you name.

Appealing the Filing of a Lien
The law requires us to notify you in writing not more than 5 business days after the filing of a lien. We may give you this notice in person, leave it at your home or your usual place of business, or send it by certified or registered mail to your last known address. You may ask an IRS manager to review your case, and you may request a Collection Due Process hearing with the Office of Appeals by filing a request for a hearing with the office listed on your notice. You must file your request by the date shown on your notice. Some of the issues you may discuss include:

You paid all you owed before we filed the lien,
We assessed the tax and filed the lien when you were in bankruptcy, and subject to the automatic stay during bankruptcy,
We made a procedural error in an assessment,
The time to collect the tax (called the statute of limitations) expired before we filed the lien,
You did not have an opportunity to dispute the assessed liability,
You wish to discuss the collection options, or
You wish to make spousal defenses.
At the conclusion of your Collection Due Process hearing, the IRS Office of Appeals will issue a determination. That determination may support the continued existence of the filed federal tax lien or it may determine that the lien should be released or withdrawn. If you disagree with Appeal’s determination, there is a 30-day period starting with the date of determination, in which you may request judicial review in a court of proper jurisdiction. Refer to Publication 1660, Collection Appeal Rights, for more information.

14

Well thank goodness you kept your word…

15

YES I did.

I did not RESPOND to anyone.

I just posted ACCURATE information about the English Language and How to REMOVE an IRS Lien.

If you are going to try do it… DO IT CORRECTLY!

GOOD ACCURATE information is needed by ALL.