Posted by JT-IN on August 30, 2003 at 08:41:58:
Is it conceivable that you could get an appraisal on this property at say, $ 250K. Of course this needs to be a full-blown appr, by a certified, licensed appraiser. If you had such an appraisal in hand, you could structure a purchase contract with the Seller for say, $ 225K, which is appx 90% of the appraisal price. Upon doing so, you could request that IRS remove the lien from the property, granting a partial release as to the real estate, and thereby allowing you to transfer the property free of the lien. This generally takes some time, in the range of 30 to 60 days. The whole key is to be abel to demonstrate to the IRS that there is NO equity in the house that will allow them to be paid off. They will generally approve such transactions where the selling price is greater than 80% of the appraisal.
Whether or not you can get your seller to go along with this scenario is something that you will have to determine. This strategy leaves them still owing the taxes to IRS, and it only releases the security interest, or lien upon the real property, so that it can transfer with clear title. IRS’s position is that it’s function is not to force people into a foreclosure, that could otherwise sell their property, had it not been for the lien. If a foreclosure ensues, it is unlikely that IRS would be paid anyway, so they are not really dluting themselves much anyway.
The key here is a systematic approach to the IRS, with proper documentation, and calmly requesting that they comply with your requests. You will find them quite cooperative, when your requests are within their perameters of what they can and will do.
Just the way that I view things…