Can I Sell my House if I Owe Back Taxes in Phoenix?
Let’s start by getting some background and definitions out of the way so you can sell your house in Phoenix quickly if you must and of course, we at Cash Now Homes buy houses cash all over Metro Phoenix regardless of their condition and or situation that you might find yourself in as the property owner. So this question is something that pops up every now and again (more often than I care to remember) so I thought I would discuss what I know through my Metro Phoenix real estate investment travels with my loyal readers and clients to include potential clients.
What is Real Estate and back taxes and how do they go hand in hand? Well for starters, if you as the property owner do not pay your federal, state or local taxes, you will find yourself in a very stressful situation and putting it quite bluntly, I would not recommend taking this specific avenue in life and better to be very clear and up front before you try to sell your house with a tax lien in Phoenix, Arizona. You don’t need the headaches so let’s start with what happens first.
So what is a tax lien? Glad you asked and more specifically a tax lien is when you have not paid the federal government what you owe them when it comes to taxes and the Internal Revenue Service also known as the much loved and respected IRS places a tax lien against your property. There’s nothing like a good old Federal tax lien on your house that just makes your eyes glaze over and makes you wonder how you got in this most precarious of situations. If you have this problem, Cash Now Homes will help you so no worries but let’s get back to one’s predicament when it comes to a nasty tax lien on your house. This normally occurs when an individual owes $5,000 dollars or more in taxes and once again, not recommended but it happens to good people each and every day due to mitigating circumstances called Life.
What’s the process that the tax liens occurs in and what steps are there so I can be aware? Great question so please see below for details.
The IRS Tax Lien folks have to follow a specific procedure so that the actual tax lien can be filed against the individual and owner of the property.
- The liability has to be evaluated for calculations sake for the property.
- A notice and actual demand for payment has to be served to the individual who owes the taxes.
- If this said individual fails to pay the tax which is owed within a stated amount of time upon receipt of the notice there will be serious repercussions.
Are there any good news here George? Glad you asked as there is a silver lining if you are the type of person that looks at life as an opportunity when chaos ensues. Come again George!! Ok, well in certain situations, you may find that it is much better to have an Internal Revenue Service tax lien on your house than say a municipal or state tax lien. This is not to say that this is going to be a walk in the park if you will but from what I have seen and heard from my professional network of fellow Metro Phoenix real estate investors is that the IRS is a bit more reasonable and willing to work with you when it comes to your back taxes and that is what I’ve noticed amongst some of the clients that I have had in the past that have faced these unwanted and nasty IRS tax liens.
Furthermore, since states and municipalities have much smaller governments, you can bet that they are going to be incredibly aggressive in getting their taxes paid by the individual who owes them and you don’t want to find yourself here at all.
First and foremost, you should pay off the state and municipality that you owe the taxes in as the IRS will give you more time as you now know because when the IRS file a federal tax lien against the individual who owes them back taxes, you will have time to work on some type of plan but remember with a federal tax lien against you, you can be absolutely assured that it will affect your cherished credit score that you absolutely protected until now and will definitely complicate one’s options when it comes to trying to finance a new house so good luck there and it just occurred to me (I want you to digest this information in small chunks as this specific situation is not very palatable in order to get a good grasp on the details) that I will need to write a Part Two for this article and continue explaining what can happen when it comes to having a tax lien in Arizona on your property.
Also, please remember that Cash Now Homes is on your side and will help you in your time of need if you need us so all you have to do is contact us and I look forward to seeing you come back for Part Two of this informative series as it pertains to tax liens on your house.
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