tax deed sale with irs lien

[Curtis Ramsay]

Hi bp I am looking at a property in florida that is coming up on the tax deed sale, it has a 150,000 irs lien on it. I have done some research and it looks like the irs has 120 days right of redemption after the sale, If they do redeem the property do they pay me back what I have invested? or am I just out everything I paid for the property? Should I avoid the situation entirely? The property is worth about 175,000

[Kyle J.]

@Bart Charkow  If the property is going up for auction at a tax deed sale then we know for certain that the IRS lien is not the only lien on the property.  

@Curtis Ramsay I'm assuming you want to acquire this property at the tax deed sale and NOT pay the IRS tax lien (otherwise this purchase would make no sense). 

It's very rare that the IRS redeems these liens.  However, to answer your question, if they were to do so you would not be out everything you invested.  You would be entitled to be reimbursed for the purchase at the tax deed sale and certain expenses you incurred that were necessary to maintain the property or keep the property safe and intact (i.e. you replaced a broken front door or window). 

On the other hand, you would NOT be entitled to be reimbursed for expenses you incurred to enhance or improve the property (so hold off on putting in those granite countertops until after the lien is cleared).

You can read all about this process here if you're interested in learning more: IRS, Chapter 12. Federal Tax Liens, Section 5. Redemptions