Foreclosure AND IRS LIEN -challenge for gurus

Comments(7)

• 
  joel6th April, 2003

  OMI - I moved the Topic to the Foreclosure / Short Sale Forum so Sharon and Dwan can answer your post. It was in the Tax Liens Forum.

• 
  DwanBent-Twyford13th April, 2003

  Hi Steve,
  
  First of all.... you have to spell my name right or I can't help you It's DWAN.
  
  Next, the IRS does short sales as well. Call the IRS 800#, ask for the workout department. The sad thing is that the foreclosure will happen before you can negotiate with the IRS. They are SLOW!!!!!
  
  If you are in no risk of losing the house, go for it. Ask the IRS to remove the lien from the property and attach it to the persons name or try to short sale it. We've done it successfully several times.
  
  Good luck.... just a note.. you might want to invest in some Tylenol first
  
  Dwan

• 
  OMISteve17th April, 2003

  Thanks "DWAN"
  I will give a try
  Steve

• 
  DwanBent-Twyford19th April, 2003

  Hey Steve,
  
  
  Any luck yet?
  
  Dwan

• 
  nmnewbie20th April, 2003

  Is this for real? I heard that if a property goes to foreclosure, and the bank receives money, the IRS can conclude that the money is taxable income attributable to the homeowner. This doesn't make a lot of sense, but then we're talking about the IRS.
  
  Anyone heard of anything like this?

• 
  OMISteve22nd April, 2003

  Dwan & nmnewbie
  Besides getting run around with advice to complete POA before can converse with anyone and shuffled to the wrong extensions and departments, no progress yet with government red tape of IRS workout department.
  "nm" misunderstands the issue. We have a 1st foreclosing on a house where the owner owes back income taxes for early withdrawal of retirement funds. The IRS lien amount is greater than the 1st and second mortgages combined. Therefore, it is my understanding that if the house is sold at auction, the IRS being a government claim has first priority over any proceeds collected, followed by the 1st mortgager, and 2nd comes in last with probably getting nothing. Second has already contacted me wanting to deal. 1st is willing, but hedging ... but I need to see what IRS will do before I commit to doling out money to 1st & 2nd.
  Will continue to struggle with IRS, but thanks for the input.
  OMISteve

• 
  shortforaliving23rd April, 2003

  First has priority over federal with the exception being that the first was made after the IRS lien. Problem with IRS workout will be FMV of property. Suggets approaching local IRS agent in charge of the account and do an offer in compromise to them outside of property position. Don't even label the property as in foreclosure or the pretense of offer. They will require financials on owners and settlement will be based on their ability to repay typically calculated over a ten year period. Normally they will not consider liquidating the homestead in their calculation for repayment. The offer must be from the liened party receiving "good fortune" from a willing friend or relative. ie gift or loan to settle.