Trustee Sale - IRS redemption question

[John Krausman]

I am new to Bigger Pockets, but have lurked for awhile.  I have a situation I am hoping someone might be able to offer an opinion on.

We bought a house at trustee sale a few weeks ago. Long story short, the trustee's deed was vested in one parter's name. We would like to move it into our LLC owned by multiple partners. So the plan we figure is cleanest is to have the LLC buy the property from the individual partner (writing check from LLC to individual partner, and recording a grant deed transferring title to the LLC). No profit or loss on this transaction since nothing has changed with property in the few weeks since sale.

Here is the concern:

There is an IRS lien on the property junior to the foreclosed loan, so the IRS has a 120-day right of redemption. I know that you can't usually sell such a property within the 120 days because you can't get title insurance. However, does anyone see any issue with transferring (selling) it to the LLC? Obviously the IRS could still redeem within the 120 days, but does having a new owner than the original purchaser at auction present any issues?

If IRS redeems, who would they pay the redemption amount to? Having sold the property to the LLC would not give the IRS any ability to redeem the property without paying someone the price originally paid at auction, right? I'm having an irrational fear that there is some impossible to understand IRS language that would allow the IRS to redeem the house with no payment since the current owner would be different from the original purchaser at auction.

All of the language I read on the IRS website mentions that redemption requires the IRS to pay a purchaser at auction back their purchase price, but I can find no info on if the property is transferred to someone else before redemption.

Any help GREATLY appreciated, as the current plan is to transfer to the LLC ASAP.

I know the likelihood of an IRS redemption is very low, but I still want to plan for that possibility.

House is located in Southern California, if that matters.