Enrolled Agent/ Certified Tax Resolution Consultant.
Education & Training with FishCoin Tax Solutions IRS 00139079-EA
August 2, 2023 12:05 PM
I represent taxpayers in New Hope, Minnesota and all the 50 States in the United State before all administrative levels—examination, collection, and appeals—of the Internal Revenue Service (IRS) and Minnesota Department of Revenue.
Contrary to popular belief that the IRS will not allow you to sell a house that has a tax lien, you can sell a house with an IRS Tax Lien. The only thing the IRS requires is that the seller who owes money to the government not walk away with money that the IRS should have received. There are three main options to deal with IRS Tax liens. They are Lien Discharge; Lien Subordination; Lien Withdrawal.
In this blog will be focusing how to sell a house using the Lien Subordination Option. “Subordination” does not remove the lien but allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage. The IRS willing be to take a lower priority position if it partially pays the tax debt or/and improve collections.
Example 1, A taxpayer wants to sell his home but owes the IRS or State $100,000. The taxpayer cannot fully pay the tax debt but wants to set up a payment plan with the IRS for $50,000 and borrow the remaining $50,000 from his dad (secured interest loan). The taxpayer can go to the IRS and request that the IRS take a second position and allow his dad to get his $50,000 from selling the house. Done right, the IRS will issue a letter stating that the IRS subordinates to his dad in the amount of $50,000 before any other creditors.
Example 2, Refinancing -Improving Collections A taxpayers wants to refinance because he is paying 14% and his bank is willing to refinance for 9%(No cash paid out) . The refinancing will free up money to pay an higher monthly payment plan to the IRS. The IRS will allow this type IRS Subordination because it will improve collections bringing the bank to first position.
You will notice a collection plan has to be in place before the IRS agrees to any proposal. Please feel free to contact me if you or someone you know needs help with resolving IRS or Minnesota tax lien issues.
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Ph. (612) 516 5878
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