Income Tax Liens In Illinois
Does anyone know what the process is when someone has a lien put on there property for not paying there income tax?Will it stay on the deed until the house is sold? Or will the irs take control of it and sell it?If they take control of it how long does the process take, and what happens to the mortgage ? Thanks
Hi'
I'll try to give you a overview of the process.1st, there's a attempt to settle the outstanding debt. If not obtainable,(for various reasons) the property then is offered to what's called " the garenteed
bidders" that are enrolled in the IRS sales program/ These party's garentee a purchase of a minimum price prior to the public bid. When the minimum is secured by a Garenteed bidder, then the property goes to auction, if the price exceeds the minimum bid, the garentor
receives a "fee" for putting up the gareteed bid(if mimimum offer not met - when offered,he then is required to buy it.) That fee received,ranges from $500- several thousands- depending on the $$ amount www.involved.The minimum is set by the IRS, and parties start the bid at the IRS minimum, then go up from there (by the bidders) This program isn't in all 50 states - it started in the west coast and
expanded out from there. Hope that helps.
Mark
Don't hold your breath on having IRS exercise their right of purchase and/or redemption in Illinois unless the equity in the house is too great. The reason is that if they do it through a guaranteed bidder and that person ends up as a winning bidder on the auction, they will tie up their money until IRS sells the property(and the IRS by law is required to get very close to the market value of the property that it sells). So, you can imagine how much money there is for an investor in Illinois(where all foreclosure auctions are settled in cash/certified funds within 24 hours) to make if they are to bail IRS out and act as a guaranteed bidder. :( Most likely the IRS lien will go away after 120 days from the auction and you will have a free and clear title to the property.