Have you ever wondered what happens to a person's property when they don't pay their taxes? For decades now, the IRS has foreclosed homes and commercial property when someone hasn't been able to pay their tax bill, but in the last couple of decades, county governments have held what is known as a tax sale. These are public auctions where people can bid on tax sale liens.

These are not pieces of land or a deed to a piece of property that the public is bidding on, but a debt that the homeowner will need to pay later on. In exchange for paying off the homeowner's debt, the homeowner will then pay the winner of the auction back, but with interest. This is a good way to make money and help someone from losing their home.

The rate is determined at the time of sale, and if the homeowner fails to pay the debt with interest, the auction winner can choose to foreclose on the property. This can be a rare circumstance because people don't want to lose their homes, but if they do fail to pay, you'll still have the first lien position on title. Either way, you win in the end.

Tax lien sales differ from tax deed sales, which are auction sales as well. These are like tax lien sales, except the winner of the auction will obtain all rights to the property, and become the new owner if the tax debt of the homeowner isn't paid off. Once this happens, the new owner will be clear of any remaining liens, mortgages, etc.

These are just a couple of ways you can profit off of someone not paying their taxes. Tax lien sales and tax deed sales can be a life-saver, or a death-send for some folk. Either way, homeowners have ample opportunity to pay the remainder of their taxes, and if they choose not to, their homes will be foreclosed and auctioned off.

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