After sale in a seizure to enforce a tax lien, what happens to the sale proceeds that exceed the tax plus costs?

• A. Remains with the Government
• B. Goes to the buyer
• C. Returned to the owner
• D. Used to pay other taxes

Answer: (C)

When a sale is conducted to enforce a tax lien, the proceeds are first used to cover the taxes owed and the costs of the sale. If the amount brought in by the sale is more than those costs and the tax debt, the extra funds belong to the property owner. In other words, the government recovers only what's owed, and any surplus is returned to the person who owned the property at the time.

Example: taxes and costs total 6,000; the sale brings in 7,000; the government gets 6,000, and 1,000 goes back to the owner. If other liens exist, they may claim funds before the surplus is returned, but after satisfying those claims, any remaining excess goes to the owner.