The Internal Revenue Service (I.R.S.) possesses the authority to seize the defaulted taxpayer’s property. No exceptions are made. Real estate can be seized. The Internal Revenue Service is also responsible for getting the properties they seize up for bid at auction. According to the law, the auction has to be advertised and open to everyone.
There are specific things you should know before bidding on real estate offered at an IRS auction. It is important to note the differences between IRS real estate bidding and a foreclosure bidding as done by Fannie Mae, Freddie Mac or HUD. In fact, it is auction of property seized as a result of neglect in paying taxes on it. A different set of rules apply to these particular actions.
Do you owe money on the property? The Internal Revenue Service will assuredly monitor correspondence with the law. Upon visiting the Internal Revenue Service’s website, you will discover that the site reads: We will provide you with any information about any hindrances or other claims on the property in Form 2434-B. Information that is without imperfections is not always guaranteed. We give you this information only to help you, the prospective bidders, decide upon the value of the item being auctioned. May the buyer beware! “Caveat emptor” or buyer beware applies if you place a bid on this merchandise! The IRS uses Quit-Claim Deeds when selling real estate. You should get in touch with the PALS to find out if someone else has ordered or performed a third party title search.
In the 180 day period after winning a real estate bid offered by any IRS auctions you can anticipate that any mortgage company or any other interested party may step forward to try and reclaim the real estate. Property won at an IRS auction does not include a warranty. The Internal Revenue Service can’t give you a guarantee. They will let you know up front that the property available to be bid on is being sold “as is” and “where is.” You are buying it exactly how it is and if there is work to be done to it, it is up to you. If you are unhappy about this after the fact, that is very unfortunate. As much as one would like to, you can’t sue the I.R.S.
