Can a widow get out of her mortgage obligation if there's a large IRS lien on the property in her deceased husband's name?
Question Details: My father-in-law recently passed. He hadn't filed his taxes in 10 years so the IRS was pursuing both MIL and FIL. I decided (I'm a CPA) to file all past due taxes as Married Filing Separately. My MIL paid the delinquent taxes and is clear with the IRS. My FIL owed $150k so the IRS slapped a lien on their home. Now my MIL wants to retire and move. The house is worth $130k with a $80k mortgage in both of their names. We know that my MIL won't get a cent out of sale. She lives in a recourse state. There are no other assets in my FIL's estate. Can she get out of mortgage obligation with sale? Will the IRS lien follow her?
If I understand your question, it demonstrates why all things being equal a married couple should own property with a right of survivorship. If MIL and FIL owned the property jointly she has a 50% interest not subject to the lien. The estate and MIL should sell the house and MIL should receive 1/2 of the equity less expenses.
