IRS lien in second position

5 Replies

If a lender in first position forecloses on a property at a traditional courthouse sale, will a second position IRS lien get wiped out? I'm guessing the answer is the same in all 50 states.

It may be state specific, if you have some weird laws, but generally the IRS has 120 day right of redemption, meaning they could come in and repay you the purchase price, rescinding the sale ...probably as common as a unicorn riding on a pink elephant, but possible.

And assuming they do not exercise that option of redemption, then it gets wiped off the property?

http://www.irs.gov/irm/part5/irm_05-012-005.html

I will buy a property with the lien if its cheap enough as slow as the gov is

http://www.irs.gov/irm/part5/irm_05-017-002.html

Originally posted by @Wayne Brooks :
It may be state specific, if you have some weird laws, but generally the IRS has 120 day right of redemption, meaning they could come in and repay you the purchase price, rescinding the sale ...probably as common as a unicorn riding on a pink elephant, but possible.

Or the IRS gets a guarantee bidder for the lien. :-)

In most cases someone needs to contact the IRS to inform them that they would pay more than the winning bidder at the trustee sale. The IRS will require a deposit from you and they will hold another auction. --- its a process that needs to begin within the first 30 days or so of the 120 redemption periodcto be successful.

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