Property Ownership

A Texas foreclosure sale purchaser who discovers a prior federal tax lien on the property should know that IRS tax liens have a federal right of redemption. This means the IRS can redeem the property within:

A30 days after the foreclosure sale
B120 days after the foreclosure sale by paying the foreclosure price plus interest✓ Correct
C1 year after the foreclosure sale
D5 years after the foreclosure sale

Explanation

The IRS has the right to redeem foreclosed property within 120 days of the sale at the foreclosure price plus interest (26 U.S.C. § 7425). This right of redemption must be considered when purchasing property at foreclosure with a federal tax lien in the chain of title.

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