Q: Home is under a Contract for Deed from a trust. Seller's name on deed. Can the IRS use this equity for collections?

A: Good morning. When filling out IRS Form 433-F, you do need to consider the home equity section. However, since you are purchasing your home under a Contract for Deed and the title is still in the seller's name, you technically do not have ownership or accessible equity in the property yet. In this case, you should note that the home is under a Contract for Deed and that the deed is in the seller's name.

For the "Account Not Collectible" status request, the IRS typically looks at assets you own and can leverage. Since the home is not in your name and you cannot access its equity, it is not considered your asset in the same way. Thus, it should not be counted towards your financial calculations for IRS purposes.

Regarding liens or levies, the IRS generally cannot place a lien or levy on property that is not in your name. However, it's always wise to clarify your specific situation with a tax advisor to ensure you're accurately presenting your financial circumstances on the form.

When entering this information, clearly indicate the status of the home and that it is under a Contract for Deed with the title in the seller's name. This way, the IRS understands that you do not have direct control or equity in the property.

A: I agree with James L. Arrasmith, in part.

It is true that the IRS does not usually attach itself to the title of any asset (like your home) if you are not included on the title. However, if you have enforceable rights of ownership, and those rights bear an equity interest, then the IRS can certainly against YOUR interest in this property.