Seller has IRS liens, need advice on how to get partial release

[Jason McDougall]

Happy Monday BP!

I've been working with a seller that is trying to sell 3 houses that are part of his father's estate. The IRS has a lien against his father's estate in the amount of $330k, and I have a contract with the seller to buy all 3 houses for $120k.  The seller and my title company have been trying to get a partial release of lien for the 3 houses so that they can be sold, but we haven't been able to make any progress. The seller is also aware that 100% of the proceeds of the sale will have to go to the IRS to pay down the $330k lien of his father's estate. The IRS has been very unhelpful and unresponsive, so I thought I'd see if anybody here has encountered this situation before, and what channels they went through to get the ball rolling and resolve it.

Thanks in advance!

[Account Closed]

Jason McDougall:

What you need to do, although it is very difficult, is stay out of the problem.  I ran a Title Company for 20 years in Texas, and I can tell you this: the IRS will deal with two people, and only two people, the legal representative of the father's estate (not the heirs, the legal representative), and the Closer for the Title Company.  No one else will be getting a reply from the IRS.  So, your best bet is to sit down and talk to the Closer at the Title Company and ask if there is anything you can do to help them.  You can also talk to the representative of the estate and ask them if there is anything you can do to help.  I have been through this a number of times, and I also worked for the IRS, and I have never seen anyone other than the taxpayer, the taxpayer's representative, or a licensed escrow or fiduciary agency handling a transfer, get a tax lien released.

But it looks like you could make the situation work for you.  Ask the Title Company who has the authority to transfer title to the property.  Then get that person to accept $ for an option to purchase at your 120K price.  That puts you first in line if this is ever cleared up.  Alternatively, talk to that person about a Lease/Purchase situation.  You could end up controlling the properties for years.  In my experience, the IRS is not going to do anything with the tax lien except keep renewing it every ten years.

It looks like a good deal. Work it!