IRS Tax Lien
I recently bought a 1st trust deed in Bakersfield, CA that has
Fed and State Tax Liens against the house. The owner has long vacated
the premises so I am foreclosing.
It is my understanding that the State Liens will be wiped off and
that the Feds will have 120 days to redeem following the sale.
Is this correct? Is there any way to avoid the 120 day waiting period?
Do I dare do any fix up while I wait out the 120 days?
Thanks for the help.
Connie
There are federal tax liens on a property we bought at auction, so I thought I'd pitch in in case it helps anyone.
I'm in Colorado, so this applies here, may be different where you are. The IRS's 120 days starts after the end of the owner's redemption period (unlike other lienholders, which have 10 days from the day the owner's redemption period ends). The IRS, if they want to redeem on their lien, like all other lienholders and within 60 days of the date of the sale, do have to submit an intent to redeem with the Trustee, or they, also like all other lienholders, forfeit their right of redemption.
So, here the owner has 75 days to redeem. If the IRS does file an intent to redeem, you would have to wait for 195 days after the date of the sale to even think about improving the property, so you wouldn't lose your improvement $ if they do redeem.
Anything anyone would throw in as a correction or addition?