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Re: IRS taking people's homes

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  • Jake
    This is from Dave s comment back in February regarding the Help with back ... rarely. I would not worry. While it s true that it doesn t happen often, it does
    Message 1 of 4 , May 3, 2011

      This is from Dave's comment back in February regarding the "Help with back taxes" thread:

         > . . . the bottom line is RARELY do they take anyone's home..very very rarely. I would not worry.

      While it's true that it doesn't happen often, it does happen & I want to mention a particularly bad case.  It's quite involved & I won't take the time to get into all the details, but what happened is a man's former wife got a lien put on her home for back taxes he allegedly owed & I presume the house has been sold out from under her.

      They divorced in 1984 & part of the divorce property settlement was that she got lifetime rights to the home, although it was mortgaged & she'd have to make the payments, pay the property taxes & utilities.  The man remarried & his problems with the IRS didn't begin in earnest until 2000, although the IRS was going back to 1994.  Nonetheless, those problems had nothing to do with his former wife or the house, which he moved out of prior to the divorce & the IRS admitted they had no claim against the former wife.

      Now here's the sticky part & those who deal with trusts need to pay attention - the man's former wife didn't have any credit & he'd made some mortgage payments for her when she couldn't - children from the 1st marriage were living in the home & he wanted to make sure they didn't have to move, change schools, etc.  And the interest rate was high.  The house was in a family trust which didn't have credit either, so the only way to re-finance for a better rate was for the man & his 2nd wife, they did have credit, to take the house out of the trust, get financing in their names, then put the house back into the trust.  Don't make a mistake like that.

      The IRS said the trust was just an "alter ego" for the man & he still had a personal interest in the house, even though he'd signed that away in the divorce property settlement clear back in 1984.  I helped them work on that case for years, but the man died of cancer last year & the other people didn't stay in touch with me - last I talked to one of the children (now grown up) of the 1st marriage, the house was about to be sold & they'd already found a place to move to, so while they didn't want to lose the family home, they were prepared to deal with it.

      The case went to the 4th circuit court of appeals, but there it died since the man died & neither his 1st nor 2nd wife stepped in to take over, which by procedural rules they could have.  10 years of legal work down the tubes & a house which the IRS had absolutely no claim to whatsoever to slapped with a lien for taxes the ex-husband supposedly owed, which didn't even start until 10 years after the divorce.

      So realize who you're dealing with - the face of evil itself - people have termed the IRS, "Individuals Representing Satan" & I would not argue with that characterization.

      ~ ~ ~

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