Six Facts Every Taxpayer Needs to Know About a Tax Lien on Their Home

If you are hit with an IRS tax lien on your home, you may feel stressed, overwhelmed and confused as to what to do next. This is where the old saying “knowledge is power” comes in. Learning as much as you possibly can about IRS tax liens will put you in a position to handle your situation in the way that best suits your needs.

Six Important Facts About Federal Tax Liens

The more you know, the better off you will be.  If you have unpaid taxes and are facing a possible tax lien against your property, arm yourself with the following important facts:

  1. When you owe money to the IRS for unpaid tax liabilities, the IRS may place a lien on your home.
  2. While a lien alone does not force you to sell your property, you must satisfy the lien before you can sell or refinance the home.
  3. Taxpayers facing tax liens on their home have several options for satisfying the debt.
  4. If you have equity in the property, you can pay the lien in whole or in part out of the sales proceeds at the time of closing.
  5. If the home is being sold for less than the amount of lien, the taxpayer can also request that the IRS discharge the lien in order to allow for the completion of the sale.
  6. If you need to refinance or restructure your mortgage, you can also request that the IRS make its federal tax lien secondary to the lien imposed by your lending institution. During these difficult economic times, the IRS has stated that it is working to speed up its response to requests for discharge or mortgage restructuring in order to assist struggling taxpayers.

When you have a problem with the IRS, it is important to not just roll over and think all is lost. There are many options that may be available to you. We encourage you to get started by checking out our free guide, The Ultimate Survival Guide for IRS Problems.