Posted by Ben (NJ) on January 25, 2001 at 12:42:47:
There is some truth to what your friend told you. I am a tax foreclosure attorney and we cut off federal liens all the time. However, this is because municipal
tax liens have been granted a “superpriority” over most federal tax liens by The Federal Tax Lien Act of 1966 (sorry I don’t have a cite, I am on vacation). Note I said “most”, there are distinctions between consensual liens (i.e VA mortgages) and IRS liens (involuntary liens). Most involuntary liens will be cut off. Another little known secret, in six years of practice I have yet to see the state or federal government even ANSWER a complaint. (lazy b*stards) They routinely default even if there is an argument that they have priority. A sharp attorney will just join them as a defendant and cross his fingers hoping that they default. (Of course they still have that 180 day post-judgment redemption period). As you can probably see this is an area fraught with landmines, loopholes and caveats. If you don’t understand EXACTLY what you are getting into, as you said, you are probably better off just avoiding properties with federal liens. Hope this helps!