History OF THE DUUUVAL HOUSE

Duuuval House

Law governing IRS Tax Seizure Sales:

The Internal Revenue Code authorizes the Secretary of the Treasury to collect delinquent taxes through the seizure and the sale of delinquent taxpayer’s property. See 26 U.S.C. § 6331, 6335. The subject property was seized based on over $2 million in current tax debt.

26 U.S.C. § 6337 provides:

(b) Redemption of real estate after sale.-

(1) Period.-The owners of any real property sold as provided in section 6335, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within 180 days after the sale thereof.

(2) Price.-Such property or tract of property shall be permitted to be redeemed upon payment to the purchaser, or in case he cannot be found in the county in which the property to be redeemed is situated, then to the Secretary, for the use of the purchaser, his heirs, or assigns, the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum.

To redeem the real property, the taxpayer must pay the purchaser the amount paid at the sale plus interest at the rate of twenty percent per year. Id. at § 6337(b)(2). If the taxpayer fails to redeem the property under section 6337(b), the purchaser exchanges the certificate of sale for a deed covering the real property. Id. at § 6338(b). The transfer of the deed operates as a conveyance of all of the taxpayer’s right, title, and interest in the real property. Id. at § 6339(b)(2).

We knew we’d get a 20% return even if we lost the house, but had the I.R.S. lawyers and our legal team ready to fight the impossibility of redemption here.