How to Sell a House When You Owe
Back Taxes In Columbus OH

Back Taxes | Homesmith.com | 877-HOMESMITH

We Buy House in Columbus, Ohio! Owing back taxes or facing tax liens can be a major roadblock for property owners looking to sell, acting as a giant stop sign that can bring the process to a halt. This is especially true for homeowners burdened with a tax lien so substantial that selling their property becomes the only viable option to settle the debt, which will be paid off at closing. One important thing to remember is that dealing with tax authorities—whether at the local, state, or federal level—takes time. Waiting until your home is under contract to address the issue can lead to unnecessary delays and complications.

If you’re facing a tax lien, it’s crucial to take immediate action. Engaging with the appropriate tax agencies as soon as possible can help you navigate the process more effectively and work toward a resolution before your home sale is finalized. The sooner you address the situation, the more money you stand to save, as interest and penalties can quickly add up, eating away at any remaining equity in your property.

While every homeowner’s financial situation is unique, and it’s always wise to consult a professional tax adviser for personalized guidance, our experts have put together the following insights on how to successfully sell a Columbus home when you owe back taxes.

Abatement

Many local taxing authorities understand that financial hardships can make it difficult for homeowners to stay current on their property taxes. As a result, they often offer various programs to assist those struggling with back taxes on a Columbus house. Depending on the homeowner’s situation, these agencies may be willing to establish a structured repayment plan, allowing overdue taxes to be paid off in manageable installments over time. This can provide much-needed relief by preventing further penalties and interest from accumulating.

Additionally, in cases where a homeowner can demonstrate significant financial hardship or meets specific income-based criteria, some local tax authorities may even be willing to reduce or forgive a portion of the outstanding tax debt. These programs are typically designed to assist low-income individuals, elderly homeowners, or those facing extreme financial difficulties. However, eligibility requirements and available relief options vary by jurisdiction, so it’s important to reach out to the appropriate tax office as soon as possible to explore potential abatement solutions. You want to try and put yourself in the best position to regain control of your financial situation and potentially make it easier to move forward with selling your property.

Satisfy the Delinquent Back Taxes

The simplest and most hassle-free way to ensure a smooth closing when selling your Columbus house with outstanding back taxes is to pay off the tax lien in full before putting the property on the market. By settling the debt ahead of time, you can prevent any complications that might arise during the closing process, allowing for a faster and more efficient transaction.

If paying the full amount upfront isn’t feasible, you may want to consider working with a tax attorney who can negotiate with the taxing authorities on your behalf. In some cases, they may be able to arrange a reduced settlement, helping you satisfy the debt for less than the total amount owed. This could make it easier to resolve the lien while still moving forward with your home sale.

Regardless of how you choose to resolve the lien, it’s essential to protect yourself by ensuring that the lien release is properly recorded once the debt is paid. Verifying that the release has been officially documented can prevent future legal or financial complications, giving you peace of mind as you proceed with the sale of your property.

Dispute

If you have successfully settled your debt or believe that the tax lien on your Columbus house was placed in error—perhaps due to a mistake in identity or incorrect records—it is highly advisable to seek professional legal assistance. Hiring an experienced attorney who specializes in disputing back taxes can be invaluable in helping you navigate the process and ensure that your property sale moves forward without unnecessary delays or legal roadblocks.

An attorney with expertise in tax disputes can assist in gathering the necessary documentation, filing the appropriate paperwork, and working with the relevant tax authorities to correct any errors in the public record. They can also help ensure that the lien release is properly recorded, preventing any lingering issues that could impact your ability to sell.

Certificate of Discharge

If you’re dealing with a tax lien on your property, you have the option to request a certificate of discharge from the IRS. This certificate effectively removes the lien from your Columbus house, allowing you to proceed with the sale without the tax debt interfering with the closing process. However, it’s important to understand that obtaining a certificate of discharge does not eliminate your tax liability altogether—it simply detaches the lien from the property, meaning you will still be responsible for repaying the outstanding debt.

Even after selling your home, the IRS may still pursue collection efforts, such as garnishing wages or placing liens on other assets you own. Because of this, it’s crucial to have a clear plan for addressing your remaining tax obligations. Consulting with a tax professional or financial adviser can help you explore options for repayment or negotiate a resolution with the IRS to prevent future financial strain.

Pay at Closing

When selling a Columbus house with outstanding back taxes, it is common for the debt to be settled as part of the closing process. This means that the amount owed will typically be deducted from the proceeds of the sale and paid directly to the appropriate tax authorities. However, to ensure a seamless transaction, it is crucial to verify the exact amount due before closing by working closely with the title agent handling the sale. This step helps prevent any last-minute surprises that could delay or complicate the process.

Once the amount has been confirmed, it is essential to request a certificate of release to officially clear the tax lien from your property records. In most cases, a state tax representative will be present at the closing to collect the owed amount from the title company’s closing agent. After the payment has been processed, the representative will issue a lien release, formally lifting the claim against the property.

Taking these steps in advance will help ensure that all necessary paperwork is completed, preventing any future complications related to the tax lien and allowing for a smooth transfer of ownership to the buyer.

Expiration

Although it is a rare occurrence, there are situations where smaller tax debts owed to the IRS may expire if they surpass the 10-year statute of limitations on tax collections. Once this statute runs out, the IRS may no longer have the legal authority to collect the unpaid balance of your back taxes, meaning you might not be required to sell your Columbus house to settle the debt. However, there are several important factors to consider before relying on this possibility.

First, the IRS has the ability to extend or suspend the statute of limitations in certain situations, such as if you enter into an installment agreement, file for bankruptcy, or leave the country for an extended period. These actions can effectively pause the clock, prolonging the time the IRS has to collect the debt. Additionally, the IRS is known for being aggressive in pursuing unpaid taxes, often utilizing liens, levies, or wage garnishments to recover what is owed before the statute of limitations expires.

Because of these risks, simply hoping that your tax debt will disappear with time is not a reliable or advisable strategy. Instead, it’s best to consult with a tax professional who can assess your situation, explore possible options for settlement or negotiation, and help you determine the most effective course of action to address your back taxes while protecting your financial future.

Bankruptcy

If you find yourself in a situation where you are unable to pay off your outstanding tax debt, filing for bankruptcy may be one of the few options available to help you sell a Columbus house while dealing with back taxes. Depending on the type of bankruptcy filed—such as Chapter 7 or Chapter 13—you may be able to discharge certain tax debts or restructure your payments into a manageable plan, potentially making it easier to proceed with the sale of your property without the burden of a tax lien interfering with the closing process.

However, if your goal is to retain ownership of your home, it’s important to understand that filing for bankruptcy does not necessarily eliminate all tax liabilities. In many cases, you will still be responsible for paying off the debt, either through a structured repayment plan under Chapter 13 or by addressing non-dischargeable taxes that remain after a Chapter 7 filing. Additionally, bankruptcy can have long-term financial consequences, such as impacting your credit score and limiting your borrowing ability for years to come.

Given the complexity of bankruptcy laws and tax regulations, as we’ve mentioned several times above, it is highly recommended that you seek guidance from a qualified bankruptcy attorney or financial expert. They can help you determine whether filing for bankruptcy is the best course of action based on your specific circumstances and financial goals, ensuring that you make an informed decision about how to move forward.

Sell My House Fast

There is another option available that can make the entire process much simpler and less stressful. Instead of dealing with the complexities of selling your home with a tax lien on your own, Homesmith offers a hassle-free solution by purchasing houses directly for cash. By working closely with the title company, we streamline the transaction, ensuring a smooth and efficient process even if you owe back taxes.

The professionals at Homesmith have extensive experience assisting homeowners in similar situations, providing expert guidance and support throughout every step of the sale. Our contracts are straightforward, eliminating confusion and unnecessary delays. Plus, you won’t need to worry about costly repairs, deep cleaning, or staging your home for potential buyers—Homesmith will buy your property in its current condition, completely as-is.

One of the biggest advantages of selling to Homesmith is speed and flexibility. There’s no need to delay and let back taxes pile up. We can close quickly, often within just a few days, giving you immediate financial relief. However, if you need more time to make arrangements, simply let us know, and we’ll schedule the closing on a date that works best for you. Our goal is to make selling your home as easy and stress-free as possible, so you can move forward without the burden of back taxes weighing you down. For a no-obligation consultation to see how we can help you, contact Homesmith at (614) 401-3651 or 877-HOMESMITH today!

Additional Resources For Managing Tax Issues

For more information on managing Tax Issues with a property in Ohio, check out a few of our recent articles below:

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