​Fed Tax Lien on Distressed Property/Owner Passed Away

[Chad S.]

Hi Folks,

I have some questions about a property that I am trying to acquire in Montana, but it seems to be quite a complicated issue. I will not try to drag out this post, but some background info is required to understand where I am at in this and where I am stuck at. Here we go!

There has been an empty lot, next to my father in law’s house that has been in distressed for years. The lot is .50 acres, with a very small house that needs some work, along with the foundation. The house is about 800 sqft.

I was interested in the property and decided to do some digging. The owner died back in 2013 and left the property with his daughter. The daughter wants NOTHING to do with the property and refused to talk anymore about it. Not knowing where to start, my wife and I contacted the county and requested a title search. The title search came back with the following info:

The owner owed state property taxes which totaled $1650.

There is also a federal lien on the property for the amount of $11,775.

There is no mortgage on the property. The deceased had paid it off.

After receiving the title, I contacted a property tax attorney and discussed with them my intentions. They informed me that a series of steps have to be taken in order to purchase this property which they called “steps for assignment process”.

One of those steps was to send a certified letter to the daughter (the Personal Representative of the estate) stating my intentions of buying the property and paying off the taxes. This was the last step I stopped at.

These are the questions I have and hopefully they can be answered:

1. Do I need to pay off the Federal Tax Lien and if so, can I negotiate with the IRS to bring the price down? I would assume they want some money out of it.

2. I have the Federal Tax Lien issue number but I am having a hard time finding the right people to contact at the IRS to discuss how to pay this lien (or even negotiate). The current phone number I have for the IRS supposedly can help, but I have not been able to get through and have been on hold for hours at a time. Is there a different way of doing this?

3.  What do I need to do to get this moving forward?

The property as it stands appraises for $40,000. With the house rebuilt, it can be resold for about $80-90K.  

Thank you in advance and answering my questions.