"Charles Markham, EA" <Notarealaddress[at]email.msn.com> writes:

- quote -

A lien filed before the petition date isn't affected by the
bankruptcy discharge even if the underlying liability is
discharged. The lien can still be enforced by levy against
exempt or abandoned property, which presumably would include
the residence, once the stay expires. Given the state of
affairs at the IRS today there may be few people left who
know that and fewer still that could figure out how to do
it, but it is the law.

Phil Marti
Topeka, KS

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"Phil Marti" <philmarti[at]aol.com> wrote:
- quote -

I am not clear on how the lien could be "enforced". The
taxes themselves are discharged. The lien merely acts to
cloud the title of property--it would have to be paid in the
event of sale or refinance, but otherwise it would jsut
expire. There are procedures to settling the lien with the
IRS, but I was unaware that the IRS could take any
enforcement action against discharged debt.

Charles Markham, EA

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"L K Williams" <lanny[at]loxinfo.co.th> wrote:
- quote -

I might add that in calculating a taxpayer's ability to make
payment or to determine an acceptable offer amount, the
equity in the house is based on a quick-sale, liquidation
value, not necessarily the amount that would be realized in
an ordinary sale. You also need to consider the cost of
preparing the house for sale and all the escrow fees, etc.

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"Charles Markham, EA" <Notarealaddress[at]email.msn.comwrites:

- quote -

I would be extremely cautious about this. As noted, the
lien would remain on the property even though the underlying
liability is discharged. Someone might just wake up and
enforce that lien.

Phil Marti
Topeka, KS

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"Bestfriend" <a1[at]usa.com> wrote:

- quote -

Under the circumstances, it seems to me he should try for an
offer in compromise. I have not done this kind of work for
several years but I did work payment schedules and offers
for many years, and the rules may have changed. Given his
age financial condition, an offer might be accepted.

The IRS does take some time to process offers but the one
year may come from the fact that the law gives them that
long to decide. However, during the time IRS is considering
the offer, collection efforts are suspended. I don't see
why he should be afraid.

Unless he intends to sell the house or try to refinance the
house, the lien does no real harm. Although it is a matter
of public record, any damage to his credit from that is
already done. Nothing he can do about it. Even if the IRS
releases the lien, it remains on his credit records for 7
years (as I recall) along with the notation that the lien
was released. But the record of the filing of the lien will
be with him until he is at least 70!

If neither of you can really afford to make the mortgage
payments, a sale could be the best solution, the lien will
be paid in the escrow process. Even if the available
proceeds are less than the balance at the time of
settlement, the lien does not prevent the sale. IRS will
get whatever funds are in escrow, the buyer will get clear
title, and would still have an open balance with IRS. A tax
lien does not work like a bank mortgage.

If he can't or won't make an offer, he might try to get IRS
to place his account in the "currently uncollectible"
status. That way, although interest and penalties continue
to accrue and the lien remains in place, IRS will stop
trying to collect.

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"Bestfriend" <a1[at]usa.com> wrote:

- quote -

First off, I hope you are considering claiming him as a
dependent.

The "bond" would cost him $25-$30000. There are no short
cuts the cost of a "bond" would be same as paying off the
IRS so that's out of the question.

Why is your brother concerned about the IRS? Are they
threatening him, or is he just worried. They will just let
the lien sit there. As you said, he doesn't want to sell his
house anyway. Yes, an OIC might take a year--but so what?
Where is your brother going? He might want to make sure the
IRS classifies the debt as "Currently not collectible".
This means the IRS will just most likely put it on hold and
let the debt expire. The IRS cannot sieze his house without
a judge's court order, and given your client's circumstances
it's doubtful they would be able to get it or even try.

Your brother might want to look at bankruptcy. Yes, it will
ruin his credit, but what does he care. Under many
circumstances, it will eliminate the tax liabilities--note
that the lien will actually remain but will expire after
some period of time.

Finally, you mentioned paying his mortgage. Given what you
said, I hate to be blunt, but that has nothing to do with
your brother's IRS problem. He has an IRS back tax problem
*and* he is unable to make ends meet and you are helping him
out.

Charles Markham, EA

PS You might want to aks your brother to give you a
mortgage on his place to reimburse you for all the money you
are "loaning" to him. That will eat up the equity in his
place.

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1[at]usa.com (Bestfriend) wrote:

- quote -

The reference is to surety bonds that are issued by a
variety of financial institutions. For more information,
use any search engine and search for the phrase "surety
bond" followed by the name of your state of residence.

Alan
http://taxtopics.net

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a1[at]usa.com (Bestfriend) writes:

- quote -

It means a surety bond. They issued by financial
institutions that issue such things. Insurance companies
come to mind. It guarantees something, and you pay for it.

The only time I've seen bonds used to secure release of a
Federal tax lien is when the underlying liability is being
litigated. There has to be some sort of provision that at a
given time the taxpayer will pay the liability or the surety
will be required to pay.

If you tell us your brother's situation we might be able to
suggest something better.

Phil Marti
Topeka, KS

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When applying for a "release of fedral tax lien", the I.R.S.
application states that they will accept a "bond" for
payment of tax.

What does this mean?
What's the name of the bond that's accepted specifically?
Where can one purchase this kind of bond?

My brother needs to have his IRS lien released, and is
interested in the "bond" alternative.

(I've looked everywhere on the net, and I find no answers to
this question.) Thanks for your help in advance.

Liz

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