Q&A with Richard Close, Answers to your Tax Lien Questions

Tax Lien Issues- Last night I held a lecture here at the office. Too busy to organize a subject and strapped for time, we made it a free-for-all Q&A. The questions gravitated towards "Tax Lien," a confusing subject for many taxpayers. I'll share the highlight reel with you.

I talk to companies that say they will remove the Tax Lien, no questions asked. Is this true?

Sorry, but NO! The companies promoting the easy removal of a Tax Lien are the same shady companies that sell Offer in Compromise for "Pennies on the Dollar." Tax Liens are automatically removed when you settle, so they just squeeze that in. This is just another shady selling tactic.

I talked with someone who sold their home to their ex for a dollar, and now the ex owes the $100,000 debt! How can this happen?

You're talking about a fraudulent transfer. He used a quitclaim deed to transfer the property to his ex wife for 1 dollar, "with love and affection," and now she's got the debt. Here's how this happens:

Fraudulent transfers like these leave a HUGE paper trail, it's easy for the IRS to find you.

Here are the hallmarks of a fraudulent transfer:

- asset (a house in this case) not sold at market value
- took place at time of existing/accruing debt
- the translation left you insolvent of the debt

You might be thinking, "I hate my ex, that @$#%- I'll transfer the debt to her and be FREE!" Nope, not that easy. The IRS will tell the ex either give the asset back to the original owner or they owe- so you know the asset is going back to you.

When someone's dies owing tax debt, will their estate go to the IRS- leaving the family with nothing?

In this example, a woman inherited a house from her father, and sold it. She made $3,000 from the sale, and now the IRS wants the money.

This depends on several things. By definition, the debt is settled by what the value of the estate is. However, if would cost more for the IRS to seize and liquidate the assets, they won't go after it. That takes a lot of man power on money on their behalf.

BUT, the inheritor sells or transfers the assets, they will be considered legally responsible for the property and the IRS will go after the equity, like in the example above.

Still have questions? Feel free to e-mail me if you have more questions. I answer all my e-mails promptly.

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