Sheriff's Sale - Federal Tax Lien ?'s

8 Replies

Hi everyone! Long time reader, first time poster. I found a property I'm interested in and I have some questions. The property is available via Sheriff Sale in Texas. While doing research, I found several "Notice of Federal Tax Lien" records. The unpaid balances on these far outweigh the value of the real estate. I should note the real estate is a small tract of land with no structures. 1) Do the Federal Tax Liens transfer to me if I buy the property at the Sheriff Sale? (I would receive a Sheriff's Deed w/ no warranty) 2) If so, how do I clear the Federal Tax Liens? I'm under the assumption that the Federal Tax Liens do transfer, but the IRS can't expect to receive such a large amount for that particular tract; therefor, what steps are necessary to resolve the liens? Thanks in advance.

I have seen some websites that state that all liens except governmental liens are cancelled. Then again one governmental site said that the IRS lien is also released.

The answer seems to be in the type of lien that they put on the property. The only one who could answer this for you properly is probably the IRS or Federal agency that put the lien on the property.

They have been known to work deals with potential buyers because they are after the individual and not the property. The property is used as leverage against the person, just like they freeze any and all funds of yours that they can find until you agree to pay them what they are "owed".

If they have not caught the individual for his crimes they may not be willing to deal as it may be likely that they return at some time to the property when they feel it is safe to do so.

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The intention of that was that if they attach someone's property (such as bank accounts or houses) to limit their ability to move about, then it would make sense that they will not release those liens until that person has been apprehended for their "tax evasion" crimes.

This is assuming only one of the reasons that a lien may be placed upon all their properties. There are many other reasons as well, but in this case, if they have the person in custody they are usually willing to release the liens as they have done their job in helping catch a felon.

This is the method they used to catch a lot of the mobsters, tax evasion and liens tying up everything they have.

It was not something that you missed, it was something that I added to show that the IRS liens are not always about the property, but are usually about the person(s) themselves.

The only way to find this out is to talk to the IRS directly.

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This is where these so called guru's like that idiot John Beck fail to teach. They teach that tax liens are first position liens. Well that's true providing there isn't an IRS lien if so than the IRS lien always takes first position.

There are times that IRS liens do not take first position!!!

I have seen their liens wiped out in tax sales totally.

I do not uderstand all the factors behind their positioning, but the statement that they are always in first position is not true.

In order to find some of the reasoning for you all, I went to US law website and found this posted by Charles Rubin. It does explain at least one of these cases and makes notes that the IRS is in the process of attempting to correct some of the problems that they have found with their liens. And also gives the actual regulation numbers of the proposed legislation to correct these lien positioning problems.

I have looked over this site for any copywright information about this article and could not see it, should that be an issue for anyone, but still wish to make sure that Mr. Charles Rubin is given credit for this post that follows.

Like any lien on property, federal tax liens on property of a delinquent taxpayer raise questions of priority of payment against other lienholders. Under Code Section 6323, the holder of a security interest (including a mortgagee or pledgee) is protected against a general tax lien if, before the IRS files notice of lien, the security interest is in existence, even if it came into existence after the tax lien arose. The holder of a security interest is protected even if the holder had actual knowledge of the tax lien before acquiring the interest.

The IRS has not updated its lien priority regulations in many years. It recently issued proposed regulations, that will be effective if and when final. Highlights of the new regulations include:

--A Form 668, Notice of Federal Tax Lien, may be filed either in paper form or electronically;

--With regard to a Notice of Federal Tax Lien that includes a certificate of release, failure to timely refile the Notice in any jurisdiction where it was originally filed would extinguish the lien;

--A purchaser of property in a casual sale is protected against a filed tax lien if the sale price is less than $1,000 (adjusted for inflation - $1,320 in 2008);

--A holder of a mechanic lien is protected against a filed tax lien with respect to residential property in an amount up to $5,000 (adjusted for inflation - $6,600 in 2008);

--Household goods are exempt from levy to the extent they don't exceed $6,250 in value (indexed for inflation - $7,900 in 2008);

--The regulations indicate that there is generally a 10-year period (reflecting the period in Code Sec. 6502 ) for instituting a proceeding in court or serving a levy to collect a properly assessed tax.

Preamble to Proposed Regulations 4/16/08; Prop Reg § 301.6323(b)-1 , Prop Reg § 301.6323(c)-2 , Prop Reg § 301.6323(f)-1 , Prop Reg § 301.6323(g)-1

Labels: Levies, Liens

Another site that states that Federal IRS tax liens can be in a secodary position is

This I do believe is directly from the IRS attorney himslef.

And for doogent's original question it does describe some of the ways to remove IRS tax liens.

But most of the information I have viewed there seems to be involving someone removing a lien against their own property and themsleves not against property you have purchased at any type of sale.

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