Legal Question in Tax Law in Utah

IRS tax liens cleared by foreclosure?

First of all, I have about $16,000 in tax liens against me. The liens are not recorded against the title of my house in the county recorders office. How would the IRS enforce the leins against my primary residence and if I let the bank foreclose upon my primary residence, will the foreclosure clear the liens or will the bank still have to pay them (and credit me with an additional $16,000 in forgiven debt that I have to pay tax on.)


Asked on 11/29/04, 10:52 am

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: IRS tax liens cleared by foreclosure?

If the liens were filed before the mortgage, they will not be discharged. If the liens were filed after the mortgage, the foreclosure will avoid the liens. They are not paid, and you will still owe the IRS the money. NOTE It may be possible to negotiate with the IRS to have liens discharged or paid for less than the assessment amount in some cases.

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Answered on 11/29/04, 4:42 pm


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