Federal Tax Lien on Auction Property

[Leslie Crosten]

I am looking at purchasing a house via online auction. It states the seller will "pay delinquent property taxes and any delinquent HOA assessments in accordance with the applicable Purchase Sale Agreement."

It also had a title report for bidders to review. The property had mortgage recorded in 2009 and has a senior 90k federal tax lien from 9/7/2010--- per this clip from the IRS website, and it being over 10 years, would that mean I'm safe?! This is a first for me (buying online auction). I may take title report to title company for them to review and advise. (I have NOT placed a bid yet- still completing due diligence).

[Kyle J.]

@Leslie Crosten You wouldn't have to pay the $90k, if that's what you're concerned about.  The IRS has 120 calendar days from the date of the foreclosure sale to exercise their right of redemption.  It's very rare they do.  

On the off chance they did proceed with redemption, they'd have to reimburse you for your purchase price, plus interest, and other allowable expenses.  

Here's some "light" reading if you want to learn more about this subject directly from the source (IRS):

IRS: Federal Tax Liens - Redemptions

IRS: Legal Reference Guide for Revenue Officers - Federal Tax Liens

IRS: Guidelines for Processing Notice of Federal Tax Lien Documents