  We employ OPE techniques within HQET to calculate the inclusive semileptonic
decays of polarized $\Lambda_b$ baryons. Lepton mass effects are included which
enables us to also discuss rates into polarized $\tau$-leptons. We present
explicit results for the longitudinal polarization of the $\tau$ in the
$\Lambda_b$ rest frame as well as in the $(\tau ^-, \bar \nu_\tau)$ c.m. frame.
In both cases we make use of novel calculational techniques which considerably
simplify the calculations. The transverse polarization components of the $\tau$
are calculated in the $(\tau^-,\bar\nu_\tau)$ c.m. frame. We delineate how to
measure the full set of 14 polarized and unpolarized structure functions of the
decay process by angular correlation measurements. A set of observables are
identified that allow one to isolate the contributions of the two $O(1/m_b^2)$
nonperturbative matrix elements $K_b$ and $\epsilon_b$.
