IRS And State Tax Lien Question
I attended a sheriff's auction today, to observe. An interesting question was raised and neither investor or one of the bank reps that was there seemed to have a definitive answer. One investor and the bank rep agreed that IRS and state liens were wiped away when a house is sold at a sheriff's sale. The other investor said that he could recall a case several years previous where the liens were not taken care of for 2-3 yrs. after the fact. I should have gone to the clerk's office after to inquire. Does anyone have any insight they would like to share. Thank you. :-?
I would suggest going to
www.irs.gov/irm/part34/ch11s05.html
www.irs.gov/irm/part34/ch06s05.html
www.irs.gov/irm/part34/ch11s05.html
Senior IRS and State Tax liens can be requested to be removed from the property by the new owner.
If the liens are senior and the new owner has title to the property, they inherit the liens.
A sale before the foreclosure sale on would assume the debt of all liens.
The foreclosure will wipe off the junior liens however it might not immediately remove either in this case as the state is owed taxes and the IRS has a right of redemption for 120 days.
[addsig]
Thank you very much for the reply. I'm still unsure of difference between junior and senior liens, but I' m sure it will present itself in due time. Thanks again
A senior lien will have 1st priority over all other liens.
A junior lien is subordinate over all other liens.
Senior is 1st and junior is 2nd as an example.
[addsig]
Thanks again. I knew the answer, just still not up to speed on all the terminology yet.
[quote]
On 2004-10-30 17:16, JohnMichael wrote:
I would suggest going to
http://www.irs.gov/irm/part34/ch11s05.html
http://www.irs.gov/irm/part34/ch06s05.html
http://www.irs.gov/irm/part34/ch11s05.html
Senior IRS and State Tax liens can be requested to be removed from the property by the new owner.
If the liens are senior and the new owner has title to the property, they inherit the liens.
A sale before the foreclosure sale on would assume the debt of all liens.
The foreclosure will wipe off the junior liens however it might not immediately remove either in this case as the state is owed taxes and the IRS has a right of redemption for 120 days.
*******So would it be correct to assume ,that in a case like that, it would be better to wait to pick up said property at auction or let it go altogether? Depending on how the numbers add up?******
[ Edited by Dchucul on Date 11/01/2004 ]
Like you said it all depends on the profit.
Do your research on the background of the property.
Check market value and market time.
No the repairs and cost.
If the numbers show a good profit buy it. If not walk away.
[addsig]