Short Sales and IRS Liens

When doing short sales you may have a deal that has an IRS lien connected to it. IRS liens are not super liens like property tax liens however, they do take precedence over every lien beyond the encumbering 1st mortgage. Generally, since a short sale rarely has equity they will not look to pursue a sale of their the lien through a certificate since it will not pay off if the property is foreclosed upon.

Now, for the reason why your here. Free form!!!! The IRS 8202 form below gives you the authority to speak to the IRS on behalf of your client. As a sharp short sale agent or investor, you should be pulling the case history from your civil court in the county the property is located. Why should I be doing this you may ask? The reason is because you need the case history in which you will that the prosecuting attorney has conducted a title search and attached it to his complaint. Free title report!!! Compliments of the bank That tip alone is worth a like button press. Anyways, getting to the point when you review the title and see an IRS lien; you need to engage them sooner rather than later.

In the case of dealing with a short sale that is currently in chapter 11 or 13 and has an IRS lien, you will need to get the pay-off from the local office handling the case. Generally the bankruptcy specialist for the IRS are local or close to the city the property is in. If your an agent or homeowner and need some help with your IRS encumbered short sale then give us a peek.

Quick Tip: If you need a pay-off contact your client and do a conference call with the IRS. They will give you a verbal pay-off and fax the pay-off hard copy over.

IRS 8202 Document =>  f8821_accessible

Quick Tip: When filling out the form…pay attention to section 3. Column A  type should be “income” tax. Form is generally “1040″; the Years or periods refers to the tax year they defaulted in not when the lien was recorded. Specific tax matter is regarding pay-off or discharge.

Good luck…Keep flipping!!