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All Forum Posts by: Jonathan Faltot

Jonathan Faltot has started 3 posts and replied 27 times.

Quote from @Chris Seveney:
Quote from @Jonathan Faltot:
Quote from @Chris Seveney:
Quote from @Jonathan Faltot:

We bought a property on foreclosure sale, it has federal tax liens attached. I have heard both ways it can follow the person or the property. I'm also negotiating cash for keys, but I may opt out of doing so if I have to wait for this 180 day redemption period for the IRS to claim the property if they do. 

what has anyone's experience been with this ? The leins are significant, but it is still a great opportunity. 


 knock on wood but never had them redeem, we filled out some form I recall that was a lot of paperwork to notify them and start the clock. I would talk to an attorney or title company as I think you have to file a document to get the clock started on the 180 or 120 days or whatever it is.


Hey Chris, so you had to nofity the IRS yourself, even tho it was just sold to you? I talked to multiple attorneys and i've heard all sorts of things... but conflicting answers on this. Some say the clock starts the day it is sold to me, others say once they are notified, and that all depends on WHO is doing the notifying. The devil is in the details...and i just want a straight answer. Even if it is just to file something like you do.

 we submitted a 14135 form and backup documentation to the IRS and heard back pretty quickly.


Great, thank you, Chris!
Quote from @Chris Seveney:
Quote from @Jonathan Faltot:

We bought a property on foreclosure sale, it has federal tax liens attached. I have heard both ways it can follow the person or the property. I'm also negotiating cash for keys, but I may opt out of doing so if I have to wait for this 180 day redemption period for the IRS to claim the property if they do. 

what has anyone's experience been with this ? The leins are significant, but it is still a great opportunity. 


 knock on wood but never had them redeem, we filled out some form I recall that was a lot of paperwork to notify them and start the clock. I would talk to an attorney or title company as I think you have to file a document to get the clock started on the 180 or 120 days or whatever it is.


Hey Chris, so you had to nofity the IRS yourself, even tho it was just sold to you? I talked to multiple attorneys and i've heard all sorts of things... but conflicting answers on this. Some say the clock starts the day it is sold to me, others say once they are notified, and that all depends on WHO is doing the notifying. The devil is in the details...and i just want a straight answer. Even if it is just to file something like you do.
Quote from @Don Konipol:
Quote from @Jonathan Faltot:

We bought a property on foreclosure sale, it has federal tax liens attached. I have heard both ways it can follow the person or the property. I'm also negotiating cash for keys, but I may opt out of doing so if I have to wait for this 180 day redemption period for the IRS to claim the property if they do. 

what has anyone's experience been with this ? The leins are significant, but it is still a great opportunity. 

All the posts here are assuming the IRS filed notice of tax lien was filed AFTER the lien that you foreclosed on was filed….. which is probably the case.  However, investors I know have purchased liens and foreclosed on them that were subordinate to IRS liens with the mistaken impression that merely giving the IRS 120 days notification will extinguish the position of and in fact the lien against the subject property.  
An IRS tax lien has the same order of priority as any other lien (property tax liens excepted).  The difference is that it isn’t automatically extinguished by the foreclosure of a SUPERIOR lien; the 120 days notifications is necessary to extinguish their claim.  

So for clarification; If the lien foreclosed is superior to the IRS lien then 120 days notification is necessary and the IRS can pay off the foreclosed lien and take ownership of the subject property.  If the lien foreclosed on is inferior to the IRS lien then the IRS lien is ineffective and not extinguished. 

thanks Don. It is a junior lien, in as it was field after the mortgage lien. the 120 window applies here thankfully. 

@Ashish Acharya as a follow up question.... 

is the IRS being notified of the sale different from them being notified it was SOLD? And who would do the notifying for the latter? They were notified the sale was happening.

an attorney told me I need to write to the IRS certified mail that the property SOLD and I'm not sure if that was already done. You seem like someone who has a experience with this. 

no matter I will be waiting 3 months to take further action on the house. 

Quote from @Ashish Acharya:

@Jonathan Faltot Federal tax liens generally follow the person, but when attached to real estate, they can remain with the property even after a foreclosure sale. The IRS has a 120-day right of redemption (not 180 days) to reclaim the property by repaying what you paid at auction. If they don’t act within that window, the lien is typically extinguished.

Before moving forward, check if the foreclosing entity properly notified the IRS—if not, the lien may still be enforceable. Also, contact a title company or real estate attorney to ensure you’re getting clear title. If the liens are large, waiting for the redemption period to expire before paying cash-for-keys may be the safer approach. Even with the risk, this can still be a great opportunity if handled correctly.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.


thanks for the sound info. i appreciate it. They did notify the IRS (USA was listed as a defendant in the notice). The liens are large, but i think waiting out the period is the way to go. i am seeking advice from a real estate attorney in regards to the clarity of the title
Quote from @Bruce Lynn:

You might also read thru this and see what applies to your situations.

https://www.irs.gov/irm/part5/irm_05-012-004


thanks Bruce
Quote from @Chris Seveney:
Quote from @Jonathan Faltot:

We bought a property on foreclosure sale, it has federal tax liens attached. I have heard both ways it can follow the person or the property. I'm also negotiating cash for keys, but I may opt out of doing so if I have to wait for this 180 day redemption period for the IRS to claim the property if they do. 

what has anyone's experience been with this ? The leins are significant, but it is still a great opportunity. 


 knock on wood but never had them redeem, we filled out some form I recall that was a lot of paperwork to notify them and start the clock. I would talk to an attorney or title company as I think you have to file a document to get the clock started on the 180 or 120 days or whatever it is.


thanks Chris. I've read both the clock starts on the sale date, but also from you and others i need to notify the IRS, because it is likely they did not receive any notice. i've heard mostly it is 120 days. i'm trying to talk to title insurance attorney. 

Thanks Bruce. I think we will just wait it out! There are worse problems to have...

We bought a property on foreclosure sale, it has federal tax liens attached. I have heard both ways it can follow the person or the property. I'm also negotiating cash for keys, but I may opt out of doing so if I have to wait for this 180 day redemption period for the IRS to claim the property if they do. 

what has anyone's experience been with this ? The leins are significant, but it is still a great opportunity.