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Short Sale: Removing an IRS Tax Lien from a property

Reblogger
Real Estate Agent with Berkshire Hathaway Home Services Stein Summers MO #1999033426

Knolly Williams fellow Realtor in Austin Texas wrote a very interesting article on Active Rain and want to share it with my readers.

Thanks Knolly for making the re-blog available

Original content by Knolly Williams AUTHOR & NATIONAL SPEAKER

If you have a short sale property with an IRS tax lien, the IRS will remove thier lien and allow you to sell the home. It takes WORK but it can be done!

In cases where the homeowner has not paid their income taxes, the IRS may place a federal tax lien on the property. Actually, the lien covers all of the person's property including the home. Typically, you can convince the IRS to remove the tax lien (from the house) by requesting a Certificate of Discharge of Property from Federal Tax Lien (Publication 783) with the IRS.

The reason the IRS has placed the lien on the person's home is so that they will get paid whenever the person sells their property. If you can convince the IRS that the homeowner is upside down and that there will be no resulting proceeds from the sale, the IRS may agree to release their lien. Along with your request, you will need to include some supporting documentation such as the purchase contract, the payoff statement from the bank, and so forth.

I have had to deal with IRS tax liens on several occasions, and they are not fun. However, there is no way to move the short sale transaction forward until the IRS tax lien has been removed.

This entire process should be coordinated in conjunction with your title company or attorney. Make certain that you are working with a title agent who knows the ins-and-outs of the partial release of lien process. For more information and complete instructions, go to www.irs.gov and search for "Publication 783."

Happy Short Selling!

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If your looking for a home in the St Joseph Mo area, you can visit my

St Joseph REAL ESTATE website at www.donareynolds.com

Comments (2)

Anonymous
Kathleen Barnato

I had a tax lien on a property that was not a short sale, but there was not enough money to pay the Federal Tax lien, after all other costs, including commissions, were paid.  I enlisted the help of our Senator, Barbara Boxer, who performed a miracle over the Christmas holiday period, with so many offices closed and government workers out shopping!  I sent her the request a day before Christmas and received the good news that the lien was removed just days after New Year's - and our escrow closing was only delayed a few days instead of weeks, or months, as might have been expected. 

Oct 21, 2009 05:59 PM
#1
Dona Reynolds
Berkshire Hathaway Home Services Stein Summers - Saint Joseph, MO
St. Joseph MO

Kathleen:  That is amazing that your Senator stepped up to help with the transaction.  At times we do need to enlist  others to help in issues like this, don't we?  Happy Thanksgiving to your families!

Nov 24, 2009 01:50 PM