Can IRS lean against property after an auction for past issues ?

Question

Venice Fl

Can the IRS have a lean against past owner you don't see until after an auction ?

After the auction date, can IRS charge against property for past owners problems ?

I have been told by a friend they can do that. He's not a pro but owns many places.

Happy Day

Sriv Nava · Answer

"until after an auction "  - meaning Judicial or Nonjudicial Foreclosure auctions?

If yes, IRS can put a lien against the past owner but it will not stick to the property that has been foreclosed. It will stick on the properties that the past owner still owns but not the one that has been foreclosed.

Details on IRS Lien and Foreclosures

https://www.irs.gov/irm/part5/index.html  Section 5.12

Jay Hinrichs · Answer

in practice though IRS rarely will move on a lien on a SFR .. unless there is SUBSTANTIAL equity... and most foreclsoures that people lose do not have SUBSTANTIAL equity... so even if they Lien it they have about 150 to 180 days to perfect.. cant recall which... and if they do they have to give you your money back plus statutory interest which currently is 9%... now you would lose any money you spent rehabbing.. you could make a claim for any money you spent to keep the home in good condition utls insurance etc.

I have bought well over 50 properties at auction over the years with IRS liens and Have had only one were the Service stepped in... but that was an extreme outlier

situation very very unique:

one off attorney held the sale at an office building that is not generally used to cry sales.. We were the only one's that showed up I think we got the property for 36k it was worth north of 300k.. Yahtzee until we heard from them.. we settled with Service paying them an additional 100k... still great deal.. but every other one I bought you just wait it out and the lien sunsets.. after the fact I think would again be EXTRORdinarily rare.

Christopher Phillips · Answer

@Lew Heur

Yes. Technically, since the previous owner has right of redemption. IRS can attach a "lien" to anything you own or a have a right to.