FREQUENTLY ASKED QUESTIONS RELATED TO AN INTERNAL REVENUE
QUESTION: How is the sale conducted?
sale is an open, public auction conducted by the Internal Revenue Service
auctioneer (the Property Appraisal and Liquidation Specialist). The auctioneer will open the bid price at or
above the minimum bid o
QUESTION: If I am the successful bidder, what happens then?
must pay the auctioneer 20% o
QUESTION: Is the property then owned by me to do what I wish to do with it?
ANSWER: The taxpayer, any lien holder of interest or any other person with a legal interest in the property has a right to redeem, or buy back the property, within 180 days after the date of sale by the Internal Revenue Service. If the property is redeemed, the person redeeming the property must pay you the amount of your bid (what you paid) for the property in addition to interest on that amount at a rate of 20% per year.
QUESTION: During the 180-day redemption period, may I collect rent if there are tenants? May I improve the property? May I evict any tenants and move onto the property myself? Is there anything I can do with the property?
ANSWER: The taxpayer and others of interest have a right to redeem the property and any action is dependent upon state law. Therefore, you should contact an attorney or legal representative for this type of advice. The Internal Revenue Service will not advise as to actions you may take against or upon the property.
QUESTION: What happens after the 180-day redemption period expires?
ANSWER: After the 180-day redemption period has expired, the Internal Revenue Service will provide you a Quit Claim Deed issued by the Area Director of the Internal Revenue Service. You must surrender the Form 2435, “Certificate of Sale of Seized Property” which was given to you upon your full payment of the bid price in order to receive the deed. At this time, the taxpayer and others of interest do not have any redemption rights. The deed discharges the Federal Tax Lien from the property and places the title in your name giving you possession of the property.
QUESTION: Do I need to make payments to the mortgage holder, county tax collector, etc. during the 180-day redemption period?
ANSWER: Any payment of expenses related to the property may or may not be recoverable if the property is redeemed. This is dependent upon the state law in which the property is located. The Internal Revenue Service does not give advice related to this issue.
QUESTION: Will the encumbrances against the property still remain after the Internal Revenue Service sale?
ANSWER: Any encumbrance that is recorded prior to the Internal Revenue Service Federal Tax Lien remains upon the property and must be dealt with by the purchaser at an Internal Revenue Service sale. The Internal Revenue Service does not pay these expenses. Even when a property tax becomes due and payable, the Internal Revenue Service does not pay this obligation. The encumbrances that are recorded after the filing of the Internal Revenue Service Federal Tax Lien and the Federal Tax Lien are discharged from the property upon the issuance of the deed to the property 180 days after the auction.
There are delinquent property taxes and taxes due to the
California State Franchise Tax Board – please see list o