CA Franchise Tax Board holding up request for subordination until seller submits back taxes....

I am a buyer trying to purchase a home, though the current seller did not file his California state taxes a few years back and as a result, the CA Franchise Tax Board says that until he files, the request for subordination is on hold. I find it hard to see why they would prevent the sale of a home until he files his taxes. The selling agent is working on this, though he seems overwhelmed and might be ready to give up, so I am trying to also look into this on my own to see if I can find some info I can pass on to him. 

 

Does anyone know how this could be dealt with? I think the goal will be to get the Franchise Tax Board to move forward, while not reducing/eliminating what the seller owes in taxes. Has anyone worked on a deal with a situation like this before? How did you deal with it? Is there some document I should look into or case precedent I can look into?

 

Thanks in advance.

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Permalink Reply by Kimberley Kelly on September 13, 2011 at 2:55am
I'm in California and closed a Short Sale that had an IRS lien attached.  It was literally a couple weeks before COE that it was found (negotiation company on Seller side didn't mention it).  Title got ahold of IRS and they did waive the property lien, but NOT the personal lien...The IRS can do what they want...deal with them directly.  As long as it can be shown that the Seller is netting zero, they should allow the sale to go through.
Permalink Reply by Richard on September 13, 2011 at 5:11am

Harry,

 

You're absolutely 100% correct.  Get the Statement of Information, Disclosures, leins info upfront.  I'm a big fan of being proactive and not waiting until things start to go south.  Things can go south with any type of sale, but even more so with short sales. 

 

I had to pound that concept (at least try) into my former agent's head.  He apparently never took me serious about it until I fired him.  I hope that I got the message across.  End result, I had to explain to my mother why I fired brother as my agent, but I hope that he's learned a lesson.  I know that I sleep better at night with potential purchases.

Permalink Reply by Kimberley Kelly on September 25, 2011 at 3:04am
I have not been doing this Harry.  Do I get the SOI from Title?  I am going to start including this.  I always get a Prelim, but extra security is the way to go..Thanks.

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