Do IRS Liens Attach? - Posted by Raymond

Posted by Jeff on November 28, 2001 at 23:30:41:

Dear Todd,

How did you negotiate with the IRS to quit claim or discount the amount of their lien on a property? Did the properties have a significant amount of equity in them? How were you able to find a contact with the IRS to get negotiations up off the table?

Thanks in advance for any input!


Do IRS Liens Attach? - Posted by Raymond

Posted by Raymond on March 16, 2001 at 20:12:43:

I just got off the phone with a guy that tells me his IRS lien follows him and doesn’t attach to the property, according to his attorney. This is contrary to everything I know. Are there any circumstance where he might be correct?

It’s a deal without the lien, no deal with the lien. The thing will probably go to foreclosure if I don’t buy first.

Thanks in advance, Ray

Yes, positively, absolutely . . . - Posted by Bob H

Posted by Bob H on March 17, 2001 at 24:30:19:

The IRS lien attaches to everything the seller owns - period. In most cases, to release it’s lien, the IRS not only requires zero net proceeds to the seller, but also a documented, fair market value sale, supported by a current appraisal. They will allow reasonable brokerage fees and closing costs to be paid from the proceeds, but no unusual concessions.

If there is equity in the deal, your best bet is to let it go into foreclosure and bid at the sale, and/or obtain redemption rights (if applicable in your state)

Re: Do IRS Liens Attach? - Posted by Todd (MO)

Posted by Todd (MO) on March 16, 2001 at 23:54:53:

Hi Ray!

I’m not an expert on IRS liens, but I have encountered a few so I’ll try to answer the best I can. IRS liens can follow the person, but there are a couple of things to be careful of. If it is attached to the property and the person sells the property, the IRS may object if the person receives any proceeds from the sale and the lien is not paid (i.e. if they quit claim it to you). If they do not receive anything, then the IRS will (at their discretion of course) release the lien from the property. I have had IRS agents show up at closings to verify that the seller did not receive any proceeds.

Anytime you have an IRS lien attached to the property, your best bet is to talk to the IRS directly and/or have the seller get something in writing stating that the lien will be released upon sale. Unless there is a lot of profit over and above the lien, I would get what will happen to it cleared up before moving on it.


Re: Yes, positively, absolutely . . . - Posted by Todd (MO)

Posted by Todd (MO) on March 17, 2001 at 11:09:06:

Not necessarily…I have bought several preforeclosures that had substantial IRS liens on them that were quit claimed for 50% of value…as long as owner received no proceeds, the IRS released the lien.

Just my experience. :slight_smile: