A tax lien is a lien imposed on real estate by a governmental agency to secure payment of taxes. The tax lien may be offered to investors in the form of a tax lien certificate. The holder of the lien can receive payment on the lien from interest penalties paid by the property owner. If the property owner defaults on all tax payment deadlines, the lien owner may receive the actual deed to the property for the value of the certificate.

Liens are usually bought through auction and require cashiers check for payment. Therefore, about 10 days in advance you will need to request cashiers checks payable to the county in which the auction is being held. Use the Trust Administration Services Tax Lien Investment Authorization form to instruct us on your purchase(s). We will then overnight the cashiers checks to you. Title to the tax liens or deed investments would be held in the name of your IRA account (First Regional Bank c/f Client Name) with the TRUST tax identification number.

Many IRA holders find it is best to get several incremental checks instead of one large check. For example, if you plan to bid on $30,000 worth of liens you may end up with 15 smaller liens or five larger ones. If you have six checks for $5,000 and you end up with four liens totaling $19,000 then you would give the county four of the $5,000 checks. The county would then issue two other cashiers checks would simply be returned to us for deposit back into your IRA.

It is very important to note that the tax lien must be titled in the name of the IRA, not your name as an individual. The lien(s) would be titled First Regional Bank c/f Client Name. The lien would also reflect the TRUST address and tax identification number.

After the new liens are recorded in the name of the IRA, the original confirmation of ownership such as a certificate or deed must be sent to TRUST as Custodian. Any income or payments generated by the tax lien investment must be deposited back to your IRA account.

Contact our Customer Service Department to assist with any tax lien transactions.