Federal law bars government from real estate land grab

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

In 2001, the federal government (Internal Revenue Service) filed this lawsuit to foreclose on a 60-acre property owned by J. Leonard Padilla and Rose Moreno-Padilla. The $239,284 IRS tax liabilities of the property owners arose out of unpaid income taxes for 1996 and 1997. When the Padillas bought the property, they borrowed $25,000 secured by a deed of trust on the property. In 2000, the owner of that deed of trust, Nelly Patino, advanced $45,655 to pay the unpaid property taxes and prevent the local tax collector from selling the land at a tax sale. Purchase Bob Bruss reports online. In this lawsuit, the IRS argued its unpaid income tax lien arose when the taxes became due, although the IRS didn't record its tax lien until after Patino advanced her money to save the property from the tax collector's sale. Patino claimed she had an equitable lien because the IRS couldn't prove it recorded its tax lien against the property owner before she paid the $45,655 property taxes. If you were ...