Non-Judicial Foreclosure

If the United States holds a junior  lien which was filed more than 30 days prior to the date of a nonjudicial foreclosure sale, the foreclosure will not divest the property of the tax lien unless proper notice of the foreclosure sale has been sent to the District Director of the IRS at lease 25 days prior to the foreclosure sale. (If the federal tax lien was filed less than 30 days prior to the actual foreclosure sale date, no notice is required for the tax lien to be extinguished.) If no notice is given to the IRS, then the property will remain subject to the tax lien, even after the foreclosure sale. However, even in the absence of the proper prior notice, the IRS has the ability to extinguish its lien by executing a proper Consent to Sale. It should be noted that even if the lien of the IRS is properly noticed and extinguished, the IRS has 120 days in order to redeem the property under its lien. 

 

When relying on notice to extinguish and IRS Lien, the agent must obtain evidence of personal service of notice of the foreclosure to the Director of the Internal Revenue Service in the form of certified mail return receipt.