If your home is foreclosed on and you had no escrow in your account and you owe property taxes on that house, can the IRS take your tax refund to pay for those taxes? I know they can for delinquent child support, back income taxes, but I'm not sure about this...thanks!
2007-12-25 05:20:38 · 3 answers · asked by MommieM750 2 in Business & Finance ➔ Taxes ➔ United States
In theory they could but it isn't likely.
Property taxes are tied to the property. If your home was forelosed upon the lender would have brought the property taxes current in order to protect their security interest. They would probably add that to the balance you owe them but that would not be turned over for collection through FMS as it would be a private debt at that point.
2007-12-25 05:30:42 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 1⤋
Your refund should be independent of your foreclosure. Property taxes are levied at the county/city level, not the Federal level. Unless the IRS itself has put a lien on the home for whatever purpose, I would think the answer is No!
For unpaid property taxes, the county usually sells a tax certificate for the amount of the taxes in the following year. A certificate holder can, after a period of about two years (most places), can call the lien on the property for a quit claim deed. The taxes are paid up-to-date as soon as the deed is settled.
You might incur a Cancellation of debt through this process, and be given a 1099-C. A cancelled debt is considered income!!! That's what you need to watch for.
2007-12-25 05:38:32 · answer #2 · answered by TBONE 2 · 2⤊ 0⤋
If the IRS has a lien on your home they can.
2007-12-25 10:01:19 · answer #3 · answered by Gary 5 · 0⤊ 0⤋