Escrow & Title
A West Virginia buyer learns there is an IRS federal tax lien against the seller. The buyer's title insurance company will:
ARefuse to issue a policy until the lien is paid
BIssue a policy but require the lien to be paid from closing proceeds✓ Correct
CIgnore the lien since it's a federal matter, not state
DRequire the buyer to personally guarantee payment of the lien
Explanation
An IRS federal tax lien is a claim against all of the taxpayer's property. A title company will typically require that the lien be satisfied (paid) from the seller's closing proceeds before issuing a clear title policy, ensuring the buyer receives clean title.
Related West Virginia Escrow & Title Questions
- Under the Foreign Investment in Real Property Tax Act (FIRPTA), a West Virginia buyer who purchases property from a foreign seller must:
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