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LawTalk
LawTalk, Attorney
Category: Real Estate Law
Satisfied Customers: 35335
Experience:  I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
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My home was destroyed by a fire and there were liens totaling

Customer Question

My home was destroyed by a fire and there were liens totaling $121,000 on the home by the IRS. Can the IRS attach the money from the homeowners insurance and keep me from rebuilding my home? I live in Fla.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  LawTalk replied 1 year ago.
Good afternoon,
I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today.
The casualty loss you suffered is not the sale of the property which results in the liens being paid, and so the IRS will not be able to force the insurance company to pay the money over to them.
Rather the insurance company will typically pay the contractors directly for the work in rebuilding the home and the IRS lien will simply remain intact on the property.
If you will look at the policy it does not allow you to demand a cash payment from the insurance company for the damage. Rather the company has the right to ensure that the property is rebuilt. Additionally, presuming that you have a mortgage as well, your mortgage also requires that the property be rebuilt and that you do not have the right to demand cash payment from the insurance company.
In conclusion, as you don't have the legal right to demand the cash, the IRS doesn't have the ability to attach the funds earmarked for the repair of the property to satisfy their liens.
You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.
Please remember to rate my service to you so that I can be compensated for helping you.
I wish you and yours the best in 2015,
Doug

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