Legal Question in Tax Law in California

Re: Tax lein on a condo in New Port Beach, CA

a tax lien on real property will affect the ability of the owner to refinance the property and will need to be satisfied if the property is sold through escrow. to actually take the residence of a taxpayer, however, the lien must be followed by irs seizure (and sale).

if the real property is the taxpayer's residence, the irs does not usually proceed to seize the property and sell it. when the irs decides to do this there are special procedures which must be followed.

SEE:

http://www.irs.gov/irb/2003-41_IRB/ar13.html

if the lien exceeds the equity of the taxpayer in the real property, principal payments on the mortgage will not add to equity but will simply be adding to the amount the irs would receive if an when the property is sold (by the taxpayer or by seizure).

Re: Tax lein on a condo in New Port Beach, CA

Generally, the IRS puts a lien against the person, which attaches to all of his assets. It gets recorded with the county, and would come up as a cloud on title if he tried to refinance or sell the property.

If he stops making payments, the lender or the HOA will foreclose, which will ruin his credit even more than the tax lien does. Plus, the claims of the mortgage holder and the HOA is before the IRS. If they foreclose, and don't receive more than is owed along with the fees for the foreclosure, he will lose the property AND still owe the IRS.

In other words, your boyfriend does not know what he is talking about, and he is causing himself more problems with his lack of knowledge.