Buying at sheriffs sale with possible IRS lien

[Robert Taylor]

I've bought quite a few properties at the sheriffs sale but have never had to deal with one with the dreaded IRS involvement. I have a title guy I work with who will be letting me know if there is an IRS lien on the property, but they did list the IRS as an "added defendant" (their term for anyone else that has a claim against whoever's being sued for foreclosure) so I'm assuming these people owe something to the IRS, not related to the foreclosure of their home.

Anyone here dealt with IRS liens on properties sold at the sheriff's auction?

[Brian Burke]

You don't have to pay the lien. The IRS has 120 days to buy the property from you for the price you paid. If you spend money fixing it up (beyond what it takes to secure and protect the property) they don't have to reimburse you, so fix it up at your own risk.

If you don't want to wait 120 days, there is a process where you can petition the IRS to release it sooner. This works best if you offer them something. I've done it twice, once for $7K, and once for $500. It took about 30 days.