Has a tax lien been placed on
your personal or business property? Do what you can to get rid of it as soon as
possible if you want to sell those assets smoothly. Your prospective buyers can
do an IRS tax lien search before making an offer, and this could be detrimental
to the transaction.
What
Can Happen
Rarely will buyers or investors agree to buy
the property and pay the back taxes (the debt owed plus interest charges and
penalty fees) themselves. They will usually be discouraged by the tax lien, however,
and consider the investment as no more than a financial burden not worth their
money in the long run. You not only will lose that buyer but may even receive
no more serious inquiries after that since your back taxes are still pending.
Sometimes, the property or the tax lien
certificate can be auctioned by the state. The IRS will set a deadline for
that, and if you are unable to pay your dues by then, a buyer or investor can
snag your asset at a fraction of its true market price. This is especially
disadvantageous if the amount of the sale is lower than your total dues (which
also means you have to find other ways to satisfy your entire debt).
What
You Can Do
One way to eliminate a tax lien is by getting
qualified for an offer in compromise. You will need to work with an experienced
IRS tax lawyer to facilitate this option.
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