How federal tax liens are treated in a foreclosure

When a homeowner in Maryland or any other state fails to pay taxes, it could result in a lien being placed on that person's property. Eventually, it could lead to the property being sold at auction. In one case, a home was auctioned twice to two different bidders after an individual failed to pay both local and federal taxes. Multiple auctions occurred because the local authorities failed to communicate with federal authorities.

A company called Triangle Homes recorded a deed on the property in April 2014 while the bidder who won the IRS foreclosure auction did the same in June 2014. Triangle Homes argued that it had the rightful title because it recorded the deed first. However, a court ruled that the North Carolina law was not in effect because of the tax liens. When the home was sold, the federal tax lien was still in place because local authorities failed to provide notice of its foreclosure sale.

Otherwise, the local tax lien would have taken precedence over the federal tax lien. For Triangle Homes to have the rightful title to the home, it would have needed to pay the federal taxes owed within 180 days. As it failed to do so, the party that obtained the property through the IRS auction was the rightful owner.

A failure to pay income tax could result in a lien placed on a home or other property. In most cases, this is a final step taken after a taxpayer ignores or fails to comply with previous notices or attempts to collect payment. An individual may wish to consult with an attorney in an effort to resolve a tax issue. An attorney might work with the IRS to remove a lien or stop other enforcement actions.

No Comments

Leave a comment
Comment Information

Contact Kundra and Associates Today

Please call our offices at 301-637-8130 or fill out the form below to arrange a confidential consultation.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Email Our Attorneys

Rockville Office
110 North Washington Street
Suite 406
Rockville, MD 20850

Phone: 301-637-8130
Fax: 301-424-7047
Map & Directions

Washington, D.C. Office
1025 Connecticut Avenue NW
Suite 1000
Washington, DC 20036

Phone: 301-637-8130
Fax: 301-424-7047
Map & Directions

Mumbai, India
C/o Anmol Sekhir Consultants Pvt. Ltd.
Chartered Accountants
3rd Floor, Sahakar Bazar
Opposite Railway Station
Bandra (West), Mumbai, India 400-050

Map & Directions