IRS Liens - Posted by Rich

Posted by Rick, the Probate Guy on May 09, 2008 at 12:19:36:

If you mean, ‘are you buying the property subject to the attached lien?’, then yes. You’ve bought the property, pimples, warts, and all, including any liens, tax, judgment, etc. that are attached senior to a position that you bought, or like the IRS, have a right-of-rescission.

While unlikely that the IRS would make a play for what little equity remains, you could decide if it wise to contact them (or not) and ask for an early release of the lien from the subject property, freeing the property title of that burden.

IRS Liens - Posted by Rich

Posted by Rich on May 05, 2008 at 15:30:14:

I have received a call from a seller who has a property that is in foreclosure. The property needs work. The property has an IRS lien against it. My question is if the seller s upside down with the property and the property goes to auction, will the IRS get their money before the lender or after? In other words, if the balance on the mortgage is $200k and there is an IRS lien for $40k and the property sells for $150k, will the IRS get their $40k and the lender gets $110k, or will the lender get the $150k and the IRS nothing? Please advise.

Re: IRS Liens - Posted by Bill H

Posted by Bill H on May 06, 2008 at 14:50:42:

Depends on the priority of the lien. If the IRS is ahead of the foreclosing lien, which I seriousl doubt, they would get first dibs on the $$$. Otherwise if they are junior, which is normally the case, they might or might not get anything.

They will be wiped from title …BUT…not wiped out. They will have an automatic 120 right of redemption during which they can elect to redeem, step in and re-sel the property, etc.

This seldom happens unless there is lots of equity.

One other thing…if you buy it before foreclosure…you will inherit the IRS Lien.

Good Luck,
Bill H

Re: IRS Liens - Posted by Bill H

Posted by Bill H on May 06, 2008 at 14:49:39:

Depends on the priority of the lien. If the IRS is ahead of the foreclosing lien, which I seriousl doubt, they would get first dibs on the $$$. Otherwise if they are junior, which is normally the case, they might or might not get anything.

They will be wiped from title …BUT…not wiped out. They will have an automatic 120 right of redemption during which they can elect to redeem, step in and re-sel the property, etc.

This seldom happens unless there is lots of equity.

Good Luck,
Bill H

Re: IRS Liens - Posted by Rich

Posted by Rich on May 08, 2008 at 04:51:16:

Thanks for the response. Are you saying that I will literally inherit the lien? And they have a 120 right of redemption? I don’t think there’s enough equity for them to do that.