USA tax lien questions

[joneil]

Hello, I'm new here and I'm looking for some helpful info. Several years ago I made some horrible choices that lead to me not paying my income taxes for a few years. i wasn't making a lot of money so I didn't owe the irs a huge amount. As soon as it reached $5k they put a lien on my home for roughly $5500. I didn't know the lien was there until recently I decided to look because I'm considering selling the house. The lien should expire in about a year (ballpark) from now. The $5500 was for taxes and penalties for the first year I didn't pay. There were 3 more years after that year that I never paid as well that all have accrued a lot of penalties and interest. I think i owe about 12 -15k total for everything. I have enough equity in my home to cover all of thr taxes owed but it wouldn't leave me with enough to start over. My question is, will the IRS take all of the money that is owed to them since the lien amount is only $5500? i have probably 25k in equity in my house and i plan to get them paid in full but i would like to keep as much money out of my equity until we get our new home built and moved into. Just for a safety net and unforseen expenses. Then they can have almost every dime I have left other than the set amount I keep put back for emergencies, and I'll start all over again at 37 years old.

I'm sorry for the long first post and I'm not even sure if this is the right place to ask this question. If it's not, I apologize. Thanks.

 

[Ugo]

I happen to be a CPA and a Realtor. Here are two possibilities.

1. Once the house sells, whatever lean they have on the property would be paid by the closing agent directly to the IRS. So in your case, just the $5,500

2. The could be working the case to put a lien for the balance as well.

The only true way to find out what the total lean they'll have on your property is doing title/lien search through a title company.

My advise...call the IRS and negotiate a settlement with them. Even if they take only $5500, they'll come after the rest either when you buy another house or via whatever income source you have. If you are financing another house and the bank sees a default judgement against you, you won't be getting a loan. Even if you pay cash, they'll put a lien on the future property.

I had a client who bought a house with cash and during the title work, he found out there was a default judgement against him by the state. The sale still went through but I warned him that the state will get their money whenever he tries to sell the house.

 

[joneil]

I happen to be a CPA and a Realtor. Here are two possibilities.

1. Once the house sells, whatever lean they have on the property would be paid by the closing agent directly to the IRS. So in your case, just the $5,500

2. The could be working the case to put a lien for the balance as well.

The only true way to find out what the total lean they'll have on your property is doing title/lien search through a title company.

My advise...call the IRS and negotiate a settlement with them. Even if they take only $5500, they'll come after the rest either when you buy another house or via whatever income source you have. If you are financing another house and the bank sees a default judgement against you, you won't be getting a loan. Even if you pay cash, they'll put a lien on the future property.

I had a client who bought a house with cash and during the title work, he found out there was a default judgement against him by the state. The sale still went through but I warned him that the state will get their money whenever he tries to sell the house.

Thanks so much for the reply. I was doing some reading on the IRS site and i found where it says the lien amount shown on a specific property is only the amount owed at the time of the lien and it will act as a running tab until the debt is satisfied. After i sell this house i won't have any property for them to come after except for a boat that i own free and clear. I want to get settled up with them 100% and get this off of me. It will put me in a tight spot but i think i will just pay them in full when the house is sold. I have some money stashed back to help start over but it's not enough for me to feel comfortable with the plans I have in motion at this time. I've had this hanging over my head for 9 years now and I'm ready for it to be over. I wish I could do a OIC and save some money but I know they'd never go for it with my assets. If i dont pay them in full, I may see if they'll cut a deal with me on the equity and take 70-80% up front and let me make payments on the rest.