Advice on IRS lien

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My father died owing the IRS $13,000 and was on a payment plan with them when he died. The put a lien on the the house which is paid for. He left the house for me and my bother. He had close to zero cash when he died. I think there is $1000 now after funeral expenses and other expenses and bills.

My brother talked to them and they said they weren't in the house selling business and that a lien would remain on the house until it was paid and nothing more was likely to happen. I don't know if I believe that. Well in the meantime, we moved my mother in the home and I am worried that they will sell the house to get their money and throw her out on the street. We are also collecting rent from her and putting into an account which we originally decided we would let grow for a few years and then go and offer them a cash settlement and get it paid.

The house is a very small house, maybe worth $20,000? I have no idea but I would like to keep it for an investment and get the IRS paid and I don't think my brother cares what happens to the home. He is also the executor of the will and he has not gone through probate yet. Not sure what the hold up is, my Dad did own some medical bills but I'm not sure how much.

Any advice on what to do would be appreciated.

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Why do you keep talking about seizing the property ? A lien by the IRS just means they expect to be paid at some time , ... (more)

SUCKISSTAPLES (Dec. 22, 2012 @ 4:51p) |

Hate to suggest going voluntarily into the lizards' den, but a tax attorney may be required for advice in view of the la... (more)

snork615 (Dec. 22, 2012 @ 11:02p) |

IANYL

Sounds like you are talking about not much money. If you start hiring lawyers (especially multiple), the money wil... (more)

BrianGa (Dec. 23, 2012 @ 1:30a) |

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Call the Texans on TV.

I would not doubt that the IRS won't do anything. A lien on the house doesn't mean they can seize it and sell it - but it does mean you can't sell it until you have paid of the lien.

Is there interest on the money due? In IL a lien grows by 9% per year. You might ask the IRS (or get a tax attorney to ask) to accept a lower amount to be paid in full immediately.

Wait, they put a LIEN on AFTER HE DIED? He is no longer in possesion of ANYTHING as a dead man. You mean they put a lien on the inheritors house. Umm that really seems barely legal.

It sounds like you'll need to go through probate. You won't be able to keep the house in his name so you'll need to get this taken care of in probate. You and your brother will either need to sell the house to pay off the lien or come up with the money to pay off the lien for clean title so you can transfer the title to you and your brother.

Do you want to be in business with your brother? If something breaks do you both have funds to pitch in to correct it or does he want all the reward with none of the risk (like most people do)

Keep in mind that you'll need to do your dad's 2012 tax return still. You'll also need to do a partnership tax return for the house later and if either you or your brother live in another state, you'll have a muti-state tax return so factor that stuff in to make sure the numbers work.

Also, look up the house on zillow.com to get an idea of what it is worth.

listen to theaccountant, listen to him.

Thanks for the replies.

Mr. TheAccountant:

Our Dad died in 2011 and the lien was on the house before he died. And in Georgia, yes I believe that interest accures for non payment. My brother is stalling probate because that will shift the responsibility of the lien to us and I guess he doesn't want the debt. My brother is in financially better shape than I am but he is trust worthy I suppose. I can tell you that he doesn't trust anyone else though and to be in business with them.

I want to simply start paying the debt back but I think he is afraid that we assume responsibility for the debt simply by paying it. Zillow is listing the house at $71k. The house is a very small and modest two bedroom that we have remodeled and it is a perfect rental property.

If you choose to keep it...pay the minimal amount required..eventually (after 10 years) the IRS will not renew the tax lien...after the abstract is updated by your attorney, he will note that and you will own it free and clear.

dealloveresque said:   Thanks for the replies.

Mr. TheAccountant:

Our Dad died in 2011 and the lien was on the house before he died. And in Georgia, yes I believe that interest accures for non payment. My brother is stalling probate because that will shift the responsibility of the lien to us and I guess he doesn't want the debt. My brother is in financially better shape than I am but he is trust worthy I suppose. I can tell you that he doesn't trust anyone else though and to be in business with them.

I want to simply start paying the debt back but I think he is afraid that we assume responsibility for the debt simply by paying it. Zillow is listing the house at $71k. The house is a very small and modest two bedroom that we have remodeled and it is a perfect rental property.


If house is really worth $71k and you have deed and a $13k lien, this should not be too hard to fix.
1) Sell the house and pay the $13k lien and split the other $50+k
2) Take equity from house to pay lien and keep it as investment
3) Do nothing and eventually the IRS will do something or the lien will grow until you have no equity.

I'd also check if Dad owed other taxes....from agencies that would seize the home (like HOA or property tax).

IRS lein expires in 10 years, unless they renew it, which is unlikely on a dead guy imo.

OliverQuackenbush said:   listen to theaccountant, listen to him.

seed your lawn. seed it.

We don't have the deed. That is problem number one me thinks. The house was given to me and my brother according to the will but we have not been through probate. The other issue is that my dad left 70% to my brother and 30% to me in the will but my brother wants to split things 50%. My Dad went a little crazy here and there and changed his will back and forth several times. So this was an internal pack that my brother and I made with each other, that no matter what the will said, we would split things 50/50.

By the way, the house was all that was left of his so called estate. I don't think you can even call it an estate unless it is worth a certain amount of money. My brother is dragging his feet about going through probate. I don't even know if the will was filed or not. Can't he get in legal trouble for not handling this in a timely manner?

I guess my last question is, do we even have to go through probate in Georgia? Can we get the house transferred outside of probate? Thanks so much!

hebron1427 said:   IRS lein expires in 10 years, unless they renew it, which is unlikely on a dead guy imo.
10 years is the SOL on IRS debt, so even if they wanted to, they couldn't renew it.

dealloveresque said:   I guess my last question is, do we even have to go through probate in Georgia? Can we get the house transferred outside of probate? Thanks so much!

If you dad only had a will your brother will need to go through probate to settle your dads estate.

Also, do you even know why your dad owed so much in back taxes (half the ones I see, get resolved by supplying them with additional information like stock basis)

My Dad owed taxes because he had an annuity that he cashed out before he died and had to pay taxes on. What sucks about that is he had the annuity that was free and clear because of age and some sales guy talked him into switching over to an new one that he had to pay commissions on. Allianz, the company that scammed him, was part of a class action because of this very thing. I need to get more clarification from my brother about what his reasons are for avoiding probate. I've just let my brother make the decisions on this because I thought that he knew what he was doing and maybe there is a valid reason that will benefit us for putting this off but as of now, I do not know what it is and I'm worried about my mother who we are trying to help. If the IRS decides to seize the property because values are rising and they want their money, she will be out of a place to live. I mean she can always live with one of us but she is able to live on her own right now and that is a last resort for her, living with someone else. It just seems that clearing this debt would be the best thing for all of us all around.

hebron1427,

Perhaps that is what my brother is thinking, stall the IRS for the next 10 years. I honestly don't know what is in his head.

Why do you keep talking about seizing the property ? A lien by the IRS just means they expect to be paid at some time , they are not seeking to seize the home

Hate to suggest going voluntarily into the lizards' den, but a tax attorney may be required for advice in view of the large sums. An estate tax lawyer if can turn attention away from the plutocrats' legacies of $$million$. Agreement with brother is not binding unless you make it a separate contract complete with whose responsibility the Marxist collection efforts will be allocated. Do not trust any unit of government not to seize property under any pretext--see "forfeiture" controversy.

IANYL

Sounds like you are talking about not much money. If you start hiring lawyers (especially multiple), the money will evaporate with the lawyers. Try to work out something with your brother first.



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