Is the buyer at Trustee sale on the hook for IRS tax...


#1

Is the buyer at Trustee sale on the hook for IRS tax lien filed prior to trustee sale?


#2

Yes. It is a senior lien and remains outstanding against the property after sale.


#3

It is my understanding that the IRS lien is only senior if it predates the Deed of Trust.?


#4

Correct. Note that the question specifically stated that it was senior to the deed of trust. ? If the IRS lien is filed after the mortgage it is junior and wiped out by the trustee sale… except that the IRS has a 120 day right of redemption in this case where they can take the property from you by reimbursing the amount you paid at trustee sale.


#5

I misread the “Q” as if it related to the Notice of Sale date rather than the T.D. date.


#6

Oh. Actually it appears I misread as referring to the deed of trust, thanks for catching my mistake. ? To be clear: ? 1. If the IRS lien is filed before the Deed of Trust in question then it is senior and will have to be paid by the successful bidder when that deed of trust is sold at a trustee sale. ? 2. If the IRS lien is filed after the Deed of Trust, then it is junior and will be wiped out subject to the 120 day redemption period mentioned above.


#7

Does serving IRS notice 120 days before sale at auction negate IRS ability to take back property?


#8

Hi Sean! What do you mean IRS filing? Should they record the lien like us or do they do something differently? What is the filing time?


#9

Yes, by “filed” I do mean recorded at the county recorders office. I’m not aware of any particular timing on the recording of IRS liens.


#10

How can you find out prior to the trustee sale whether or not there is an IRS tax lien? Will it always show up on a property profile. Is there any way that it could not show up on paperwork but still legitimately exist?


#11

I’ve never seen it on a property profile, nor a typical transaction history. You will likely either need to go down to the county recorder and do a name search, or get a preliminary title report from a title company.