How do I find out is there are IRS liens an a property before I bid at auction?


#1

How do I find out is there are IRS liens an a property before I bid at auction?


#2

Hi Gordon,
You would want to do a name search in the County Recorders grantor/grantee index.


#3

Hi Gordon … IRS liens will be recorded … you can check down at the county recorder’s office. Many counties offer online access, but limit your view to the record summary info (recording date, document number and document type) and you will not be able to see the $ amount of the lien unless you have “full view” (document view) … which is available once you are physically onsite at the recorder’s office. You should also look for REL IRS Lien … the “REL” stands for “release” meaning the person/entity subject to the lien has satisfied matters with the taxman.

IRS liens are important to be aware of, as they are super senior and the IRS reserves the right to redeem any property sold at auction to satisfy the debt … But, the IRS has a limited budget to redeem properties and they commonly fail to act within the 120 day redemption period. There are various “dodge and weave” strategies that may (may < operative word) prove successful versus IRS liens, including delaying the recording of the deed, and possibly paying off the lien if it’s a nominal (inconsequential) amount. Some investors have, immediately following a steps buy, contacted the IRS to negotiate the lien payoff … This proactive approach may NOT necessarily be the best option (as it’s oft best to let sleeping dogs lay) unless the payoff $ amt. is minimal. Waiting 120 days before recording may prove to be the best tactic.

There has been plenty of discussion on this topic on this forum. If you enter “IRS Lien” in the search tool bar, I’m sure you’ll find more to read.