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“font-family: Verdana; font-size: 13px;”>Since the economic downfall of 2008, many residents in the St. Louis “font-family: Verdana; font-size: 13px;”>area find themselves with real estate void of equity (or upside-down) and the Notice of Federal Tax Lien attached.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Double whammy! The owner thinks that he/she cannot sale the property due to the presence of the Federal Lien.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Oh, but you can. Although your personal residence or rental property is burdened by the Federal Tax Lien, a sale of that property is yet an option.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Let’s review.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> State law determines the interest in the property in question to which the lien attaches. Federal law determines the consequences.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Internal Revenue Code Section 6325 (b)(2)(B) allows the taxpayer to obtain a “Certificate of Discharge” from a “piece’ of property for NO MONETARY CONSIDERATION.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> That is right! Should you be upside down in your personal residence or a piece of property that currently is without equity and want to sell it, the IRS will discharge that property from the effects of that weighty tax lien for no money.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Now, let’s not get this twisted!
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Do not present a funny book real estate appraisal! It is well investigated to prove that you have no equity, which means that you will have to have it appraised by a reputable, qualified appraiser of real estate, and compare it to the balance due on the property and the tax lien for that piece of property to get discharged.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> What this means to the taxpayer is that you no longer have the monthly mortgage payment on the house or rental real estate that you cannot afford and you do not have to file bankruptcy or prejudice your credit score (any further).
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Basically; what this equates to is that a discharge
“mso-spacerun: yes;”> that the interest of the United States in the property to be discharged has no value.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> This property may not have value to the IRS, but think of the money it will save you in a bad situation. No house payment that keeps you consistently broke or
“mso-spacerun: yes;”> you want to avoid foreclosure.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> A discharge from the federal tax lien is a sale. It would be comparable to someone taking over your mortgage payment, and saying to you, “You are free at last, free at last.”
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Yes, you may have to downsize, but it is a step above foreclosure. Additionally, you sold your house and the IRS provided permission. This will assist you in the future to read the fine print on mortgages, and your personal business will not be published in the paper as it is in foreclosures.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Do not wait until you have foreclosure documents be proactive. Get a “Certificate of Discharge from the Federal Tax Lien” as prescribed in IRC 6325 (b)(2)(B).
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Besides if you have to move/relocate, do so without that burden.
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“font-size: 10.0pt; font-family: Verdana; mso-bidi-font-weight: bold;”> Alma M Scarborough is an enrolled agent with Scarborough’s Tax Affair (314-621-1402).
