Income Tax Question


#1

It is my understanding that if there are unpaid personal income taxes by a property owner that it takes priority over a 1st DOT on their primary residence. Does anyone have any advice as to how this would be investigated prior to purchasing a property at auction?


#2

In both cases that is essentially incorrect, but you do need to look at state and federal income taxes separately. These tax liens are treated? like any other lien when determining priority and what gets “wiped out” at foreclosure auction - with one exception - IRS liens have a 120 day right of redemption. But if they fail to redeem within the 120 days, then their lien gets wiped out like any other (assuming it is junior to the foreclosing lien). There is quite a bit of discussion on this topic within the forum, you might try doing a search on IRS in our search tool.