My uncle has passed away and he neglected to pay some 50,000 dollars in back taxes on his business. The children are left with his home that the IRS has levied a lien against. How soon does the IRS come in and take this property for back taxes after the death of the taxpayer? What is the best course of action for his children to take? Paying this loan off for his kids is way over what they can afford. Thank you for any information you can offer.
2007-03-11 07:56:37 · 2 answers · asked by Marie 7 in Business & Finance ➔ Taxes ➔ United States
If the home has equity, the Federal Tax Lien (FTL) will not be released until satisfied or expired. Your family needs to obtain a copy of the FTL to determine what taxes were owed and when they expire. If this lien is over 10 years old, it may be expired. IRS has a statutory limit on the collection of tax. They do have the right to reduce a claim to judgement and prolong their right of recovery. Very rarely do they afford themselves of that option. If the FTL is valid and you can't full pay, sell the house and IRS will get paid at closing. Any money left over would go to the owners. If his estate is in probate, the executor would handle it. Selling now would stop more penalty and interest from accruing. If you are unsure that you can do the research, hire a CPA or Enrolled Agent (EA). Do not hire some bozo who runs late night TV commercials or advertises that they can "reduce your taxes up to 99%." Those guys are often ripoffs.
2007-03-11 08:23:08 · answer #1 · answered by exirsman 5 · 1⤊ 1⤋
Since the IRS already has a lien on the property, the debt to the IRS will be cleared through probate. The executor of his estate is responsible for taking care of that.
2007-03-11 08:15:34 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 0⤋