Can You Sell Your Home With an IRS Tax Lien? Yes, You Can!
Updated: Jun 22
By: Brian Barto, EA
Our tax debt resolution firm works with clients in Winchester, VA who owe back taxes. Millions of taxpayers owe back taxes, which also means that millions of taxpayers have Tax Liens. If you owe money to the IRS, there is already a tax lien against you and all of your assets, including those assets you acquire in the future. This includes your house! Referred to as the silent lien, it arises automatically by statute if a tax liability is assessed.
If, after the demand for payment is made by the IRS, you fail to pay the balance in full, a lien arises in favor of the U.S. government. The IRS doesn’t have to do anything further for that lien to attach. For smaller balances, you will not even receive a notification of the lien. If you have a balance greater than $10,000, you will likely receive a Notice of Federal Tax Lien.
Many taxpayers incorrectly assume they cannot sell or refinance their house if the lien exists. This is NOT the case. One option is a Lien Discharge. You may be able to discharge the house under the tax lien. The IRS will gladly allow this...IF the transaction in some way helps the U.S. government collect some of the debt. For example, If there is equity in the home but not enough to fully pay the outstanding tax liability, the IRS can issue a lien discharge so the buyer can take good title upon proof that the IRS is receiving all of the equity in the property. Important to note that any equity in the property must go towards paying the IRS debt first.
Another option is a Lien Withdrawal. If you owe less than $25,000 to the IRS and have established a direct debit installment agreement, you may be able to request a lien withdrawal.
These are just two of the strategies you can use if you want to sell or refinance your home. Contact a tax debt resolution specialist for assistance. Click here for additional information on Lien Discharge, Withdrawal, or Subordination.
At Tax Debt Resolution Services of Winchester VA, we help you eliminate your IRS issues and the stress the IRS has created in your life and help you get back to doing what you do best! We help our clients in Winchester, VA to resolve their tax debts! If you need assistance please feel free to contact me at 540-662-4432 or firstname.lastname@example.org.
24 Weems Lane
Winchester, VA 22601