Help With FL IRS Tax Lien Issue..
I have a property I am evaluating. The owner is done with the, meaning ready to stop paying and let the bank have it, and he lives out ot state. It is a dream property from an investor point of view. There are issues which I think I know how to handle, but one I don't. While doing a Title search we have come across an old IRS Tax lien from 95,96 that was for 22k before fees and interest. This makes this deal a bit less SWEET and I would like to know if this sore spot couldn't be used to actually work the deal in another way?
Is there some way to work with this? Purchase it or something? Or do I just have lump it into my cost for the property if I want to take it.?
Thank you for you help.
Mole
Go to the courthouse and actually pull the Notice Of Federal Tax Lien. In the document itself there is a paragraph that reads " IMPORTANT RELEASE INFORMATION: With respect to each assessment listed below, unless notice of lien is refiled by the date given in column (e), this notice shall, on the day following such date, operate as a certificate of release as defined in IRC 6325(a). "
Another thing is to look in the recorders index for related documents. The doc you are looking for is Entitled "Certificate of Release of Federal Tax Lien.
Sometimes a title search does not reveal the certificate of release, and no one ever reads the actual lien itself, to determine if the lien has actually expired.
If you have either pieces of evidence, most lenders will accept this to clean up the title.
macapamole--(FL)---------------
What is the status of this lien? Is it still outstanding? Has the (non-)taxpayer been paying on the lien? How much?
Remember, that liens like this accrue interest and so will be MUCH more than the original amount, unless payments have been done.
Does the taxpayer have other valuable assets that the IRS could come after, such a personal home, other real estate, plane, boat, cars, etc? Reason to know this: you can ask the IRS to release a particular property from their lien. They are unlikely to do this unless the owner is paying on the lien or has significant other assets which they can keep their lien against. You might get them to release their lien for say $3K, $5K, or so.
You need to have a whole lot more information before you can make sensible decisions, I'd suggest.
Good Investing********Ron Starr*********
Ron,
Thank you so much for your answer. I will work to find out that information. It amazes me as a newbie RE Invester ALL THE THINGS I DON'T KNOW. Your questions are exactly the kind of answer I need.
Very gratefully,
mole
macapamole--(FL)---------------
You need to feel you're one of the crowd when you say that. We are all learning, even those of us with 25 years of experience.
Today, I clarified the issue of offsetting income by putting short- and long-term capital losses into your 1040. I also had a question about how courts might treat a lease with option situation on a 50-unit Oklahoma City apartment complex if the mortgage lender tries to enforce their due on sale clause. And then would the IRS consider a long-term--but not 30+ year--option with a lease to be the acquisition of a property when considered in the light of doing a 1031 exchange into the property without getting the deed--to prevent the lender from calling the loan due.
Then, there was the discovery of a small town in Oklahoma that has strong demand for rental units and not very many of them. Didn't know that town was in such a favorable condition for a rent house owner.
So, you see, there is always more to know, as long as are you are active and trying to make things happen.
Good Investing and Good Questioning**************Ron Starr************
Ron,
Thanks again for the encouragement. Although I find all the other stuff you were talking about to be WAYYYY beyond my league. But maybe someday I wiil play in that ballpark.
I am busy getting all the information I can from the homeower and his son (who has the IRS liens on him). The situation with this house is that the son bought the house and the father co-signed. The son then went though some troubling times and the whole mess has become his father's now. His father wants out of the property and is going to give it to me. All the numbers looked great till these liens came up on the title search.
Any suggestions on how I should proceed to get rid of these? I will find out about other assests that the son may have and what his current financial situation is. Since this is really his problem I would like to put it back to him if we can. Meanwhile I would like to start negociating with the IRS, because I am sure that is a "quick" process. Am I going to hit any snags trying to do this in behalf of the person whom the liens are against.? Should I start low and ignore all intrest and fees that may have been added to it. Or should I work out some sort of other arragements.
thanks again.
Mole
You can negotiate with the IRS to either do a partical release of lien, or to pay off the debt for less than what is owed. Ask the Short Sell Pro or in the short sell forum about negotiating with the IRS.
Is the son still the owner or is the father? If tge father is now the owner who was the owner when the IRS liens were filed?
Great ideas..
To answer the owner question, they are both on the loan and title. The father cosigned for the son. But the son was telling me the other day that he doesn't understand how those Liens ended up there, because they were against his business which was a corporation.
Also, as an update, I have most of my documents back from the owner and have been given the deed and all the information to work with the lender on the loan. So... now how do I do this subject to thing???? hee-hee. Could use some help on timing and if I should record the deed now or wait to negociate with the IRS before recording the deed.?
Anyone?
Cy
Investigagte the liens - if they were for corporate taxes only get them removed from the personal property
Negotiating with the IRS ahead of time as others have advised is a good start. But if you can't work a deal with the IRS in advance of foreclosure, look to see if it makes sense to buy the mortgage/judgment from the lender, continue the foreclosure and buy the property at the sale.
Remember that the IRS does have a right of redemption that permits the Service to set aside a sale if they think there is suffificient equity to warrant such action. If you can buy the judgment at a discount and then buy the property at the sale, even if the IRS does redeem, you get paid for principal, interest, costs and improvements. However, you still won't be able to deliver marketable title for 120 days after the sale, unless you get a release.