IRS LIEN

12 Replies

Hi BP,

IRS lien on the property, last filled 2001.does it stay after a bank foreclosure ?

Thanks,

YA

That has always been an interesting question.  That would depend on if the lein is against the actual property or the person who owned it.  The last experience I had with an IRS lein the lein was actually filed on the person so the property was free and clear after the foreclosure.  Cetainly would be something worth asking the local municipality about or a legal expert in such matters.  The IRS changes their rules a lot.  

   Congratulations on doing your due diligence.  Some people may not have seen that if they weren't looking closely. 

Robert Breen, Real Estate Agent in MI (#6502376288)

    @Robert Breen Lien is on the property.Day of Assessment 02/18/91. Last Day for Refiling 03/20/01. Status of limitations maybe ?

    Google IRS lien and 120 days right of redemption.  Has this property been foreclosed?  If not, are you looking to be the guaranteed bidder?  Again, google guaranteed bidder and see what you can find.  What are you trying to accomplish with this deal?  Maybe @Steve Babiak will be kind enough to post links that you can read up on.  He's the master of finding links on BP.

    Minh Le

      Thanks,@Minh Le I'm considering on biding on a property in a foreclosure action.

      Originally posted by @Yechiel Abekassis :

      Hi BP,

      IRS lien on the property, last filled 2001.does it stay after a bank foreclosure ?

      Thanks,

      YA

      YES, but only for the 120 days right if redemption that the IRS gets; that date in my area typically starts from when the new deed records.  

      YA just remember it would not be smart to do anything with the property until the IRS lien period has expired.

      For example if you do a clean out and put thousands to tens of thousands in repairs and the IRS decides to redeem you will not be compensated for any of that. You just in most cases get back your bid amount and closing costs from the foreclosure.

      Some people I have seen just rent it out and make some cash flow for 3 to 4 months while they are waiting on what the IRS will do.

      I am not an expert with IRS liens so hopefully others will chime in.

      I have bought several properties that had IRS liens against them, all in junior position to the mortgage being foreclosed on.  In none of these cases has the IRS exercised its right to redeem.  None, that is, until I purchased a property on April 13, 2015 with an IRS lien filed.  I was notified by the foreclosing attorney a few days after the sale that the IRS had notified them that it planned to redeem the property.  I will post a follow-up as the situation is resolved.  

      Follow-up to my previous post:

      The IRS determined that they are choosing not to exercise their right of redemption on this property.  This determination came about 4 months after the forecosure sale.  They basically had me tied up for 4 months.  

      From the very beginning, It was improbable that they would, mainly because the numbers just did not work, (Auction price, current value, cost of selling and the lien amount.) The IRS has a form that may be filed with the local register's office of their relinquishing their rights to the subject property. 

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