The Internal Revenue Service (I.R.S.) possesses the authority to seize the defaulted taxpayer's property. There isn't any exemption provided. Existing properties, even real estate, are not exempt from the threat of seizure.

The IRS 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 need to know before bidding on a real estate auction hosted by the IRS.

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.

Does the property have a mortgage on it? The IRS will most certainly verify this. When you go to the IRS website you will find the following words:

Our offices will apprise you of any bottleneck that is known of against or other claims on the property that is listed on form 2434-B. They won't guarantee you correct, complete information. We give you this information only to help you, the prospective bidders, decide upon the value of the item being auctioned. Caveat Emptor! "Caveat emptor" or buyer beware applies if you place a bid on this merchandise! The IRS conveys the property it sells by means of a Quit-Claim Deed. It's probably best to contact the PALS to see if a third party title search has been requested.

A common waiting period is 180 days after a winning IRS Real Estate bid to ensure other interest parties can have a chance to claim it. The IRS can't give you a guarantee. You should be aware that when the property is listed as 'as is' and 'where is', that literally means you are bidding on a property that will not be changed. It is sad that you are dissatisfied later, when it is too late to do anything about it. You cannot sue the Internal Revenue Service.