I recently purchased a property from a private party. I had my title company do a lien search, and they found an IRS tax lien recorded in the Seller's name (I closed w/o title insurance). The seller was married, but the property in question was in her name only. Her estranged husband agreed to sign an inter-spousal transfer deed, and I bought the property subject to the IRS lien. Now, I want to sell the property and IRS is telling me that the husband also had liens, and that since we're in a community property state, I have to pay off his liens too. My position is that I'm a BFP, since I had no knowledge of his liens as my search only uncovered the liens against the record owner, the wife. I had no knowledge of husband's liens, so I should not have to take subject to them. Thoughts?
You are going to have to consult with a real estate attorney who can go over all the facts with you and advise you on that basis. The problem that appears to be implicit in your description is that the property may have been community property, even if it was titled in only one spouse's name. As I understand the matter in California, when real property is conveyed to a married person, it is generally presumed to be community property. As such, if this property was community property, then the husband had an interest in the property. If he had an interest in it, then the tax liens filed against him would have attached to his interest in the property. The reason why I think this may be an issue is your statement that the husband signed an interspousal transfer deed. Again, as I understand the matter under California law, that type of deed is used to break the community character of the deeded property. The trouble is that if the husband signed the interspousal transfer deed after the tax liens were filed against him, then those tax liens followed that deed and remained attached to the property.
My answer does not constitute legal advice and may not be relied upon by anyone for any purpose and does not constitute an attorney/client relationship or an offer to form such a relationship. This disclaimer is intended to be fully compliant with the requirements of Treasury Department Circular 230 and the terms thereof are fully incorporated by reference.
You may very well NOT be a BFP. The search of the records may not have been legally adequate. Please contact a real estate attorney in your state to discuss whether the husband's lien can somehow be extinguished.
This is not intended to be legal advice, and is general in nature.
You stated that you "bought the property subject to the IRS lien", but you did not assume the lien. The IRS has a priority right against other creditors for this property. If there is a federal tax lien on your home, you must satisfy the lien before you can sell or refinance your home. After the federal tax lien attaches to property, it remains on that property until the lien has expired, is released, or the property has been discharged from the lien. The transfer of property subsequent to attachment does not affect the lien. If property is sold by the taxpayer, the lien attaches to whatever is substituted for it, as it reaches all of the taxpayer’s property and rights to property. As another attorney mentioned, "this property in CA may have been community property, even if it was titled in only one spouse's name." Thus, the IRS may go after either spouse who filed join tax return which resulted in tax delinquency and subsequent tax lien. Arguing your position with the IRS only works when you can prove your point by sufficient evidence. You have several issues here that would be better addressed by an attorney during in-person consultation.
DISCLAIMER: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed. Guzhva Law Firm, PLLC periodically publishes or posts articles, presentations or news posts and other information on this website to apprise existing and potential clients about new developments in law. Please note that if you post comments or articles to any forum, blog or message board on this site, any personally identifiable information you provide in those comments or articles may be read, collated and used by anyone viewing them. As such, we are not responsible for personally identifiable information you may choose to make available through these channels.
Our Rating is calculated using information the lawyer has included on their profile in addition to the information we collect from state bar associations and other organizations that license legal professionals. Attorneys who claim their profiles and provide Avvo with more information tend to have a higher rating than those who do not.What determines Avvo Rating?Experience & background
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline