Denver, CO asked in Real Estate Law and Tax Law for Virginia

Q: Can the irs enforce a tax lien on a cash sale for property?

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3 Lawyer Answers
Ross Cameron Hart
Ross Cameron Hart
Answered
  • Salem, VA
  • Licensed in Virginia

A: The IRS has a motto: "We've got what it takes to take what you've got".

Practical response: IRS has filed a lien on property; the Owner sells it to Buyer and Buyer pays Owner cash. IRS isn't paid. The lien remains on the property and IRS can file a suit to take the property away from Buyer so they can get their lien. Buyer, not wanting to pay for something that can get taken away, wants the IRS lien released from the property before he agrees to finish the purchase.

So it's not as much as IRS 'enforcing' it's lien as it is a buyer refusing to buy the property unless the IRS lien is paid. You get the same result.

Bruce Alexander Minnick agrees with this answer

Richard Sternberg
Richard Sternberg
Answered
  • Potomac, MD
  • Licensed in Virginia

A: The form of payment won’t matter if the IRS has put a proper lien on the title. You can’t close without paying off or bonding it off. Nobody will insure that title, and the buyer will be quite upset if he buys without a proper closing and then learns that the property has gone to a tax sale or foreclosure.

Bruce Alexander Minnick agrees with this answer

Bruce Alexander Minnick
Bruce Alexander Minnick
Answered

A: The IRS can--and often does--enforce tax liens against anything they can find that is in anyway connected to the taxpayer who has not paid the taxes. The form of transfer does not matter.

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