IRS Tax Lien on Real Estate Not In Your Name

  • In S. v. Rominski, et al a District Court in Illinois has held that the IRS may file a tax lien against an individual’s real estate even if the property’s legal title holder is another individual. A couple lived in a property which was titled in the husband’s name only. In order to protect his property from potential malpractice claims, the husband who was a practicing attorney transferred the property to his wife for no consideration. Later on, the couple divorced but agreed that the property belonged to the husband who continued living in the house. When his federal income taxes went unpaid, the IRS filed a lien against the property. The husband argued that since the property was titled in his wife’s name the lien was invalid. The court held that the husband was the true owner of the property and his ex-wife was only holding the property as his nominee. Therefore, the IRS’s federal tax lien was held to be valid.