Can I Sell My House with a Federal Tax Lien?
The quick answer is Yes – you can sell your house with a federal tax lien.
A federal tax lien on your house is a legal claim against its value made by the federal government in response to an unpaid tax debt. They will first try and collect your debt by sending notices and calling however if that is unsuccessful, they will often resort to more forceful methods.
CAN I CLOSE ON MY HOUSE SALE IF I HAVE A FEDERAL TAX LIEN?
If you have enough equity in your house, meaning the difference between what the house is worth and what you owe on it, you can close on your house. Understand that at closing, your federal tax lien will be paid off first and your proceeds will be reduced by the amount of the federal tax lien.
WHAT OTHER OPTIONS DO I HAVE OTHER THAN PAYING THE FULL AMOUNT OF THE FEDERAL TAX LIEN?
Dispute the Tax Lien – If you believe the federal tax lien was filed in error or the incorrect amount, you should dispute with IRS prior to listing/selling your home. You can do this by requesting a Collecting Due Process hearing. At this hearing, you are able to present all the evidence you have as to why the tax lien is incorrect.
Remove the Lien by Resolving your Tax Debt – You can resolve the tax debt by either paying the full amount or in more common situations by setting up an IRS payment plan.
Apply for a Certificate of Discharge – A certificate of discharge removes the federal tax lien from your home. The IRS will often grant a discharge if you have comparable property to which they can transfer their claim.
Wait for the debt to expire (which almost never happens) – If you’ve had the tax lien for close to a decade, then it may be wiser to wait to sell your house until the 10-year statute of limitations period ends. That will free you from having to pay the tax lien. HOWEVER, don’t hold your breath waiting for this to happen. What is more than likely is the IRS will file suit against you for collection. This judgment will remain in place until it is paid in full.
And that’s where we can help you. We have many experienced agents who can guide you through the entire process if you are interested in selling your home with a lien. Give us a call today! 1-888-850-2636 www.homeinc.com
