Can the IRS Put a Lien on Your House? Understanding Federal Tax Liens and Your Home

What is a Federal Tax Lien?

A federal tax lien is a legal claim by the Internal Revenue Service (IRS) against your property when you fail to pay your tax debts. This lien secures the government’s interest in your property, including your home, until the debt is satisfied.

How Does a Tax Lien Affect Your Home?

A tax lien can significantly impact your ability to sell or refinance your home. Potential buyers or lenders may be hesitant to proceed with transactions due to the lien’s presence. Additionally, the IRS can initiate foreclosure proceedings to seize and sell your home to satisfy the debt.

Options for Resolving a Tax Lien on Your Home

If you have a tax lien on your home, there are several options available to resolve the issue:

Pay the Tax Debt in Full: The most straightforward solution is to pay off the outstanding tax debt, including any penalties and interest. This will release the lien and remove the IRS’s claim against your property.
Installment Agreement: You can enter into an installment agreement with the IRS to pay off the debt over time. The IRS may release the lien once you have made a significant down payment and entered into a formal agreement.
Offer in Compromise: If you are unable to pay the full amount owed, you may be eligible for an offer in compromise. This allows you to settle the debt for less than the total amount due. However, the IRS must approve your offer, and you may need to provide financial documentation to support your request.
Discharge of Property: In certain circumstances, you may be able to request a discharge of property from the IRS. This removes the lien from your home, allowing you to sell or refinance it without the burden of the tax debt.

Preventing a Tax Lien on Your Home

To avoid a tax lien on your home, it is crucial to:

File your tax returns on time and pay your taxes in full.
If you cannot pay your taxes on time, contact the IRS immediately to discuss payment options.
Respond promptly to any IRS notices or correspondence regarding unpaid taxes.
Consider setting up an automatic payment plan to ensure timely payments.

Additional Resources

For more information on federal tax liens and your home, refer to the following resources:

IRS Publication 783: Instructions on How to Apply for Certificate of Discharge From Federal Tax Lien
IRS Publication 1468: Guidelines for Notices of Federal Tax Liens and Centralized Lien Processing
IRS Website: Understanding a Federal Tax Lien

Can The IRS Put A Lien On Your House

FAQ

How long before the IRS puts a lien on your house?

If you do not make the payments within ten days after the “Notice and Demand for Payment” letter, a tax lien will arise. The IRS can file a Notice of Federal Tax Lien, which alerts your creditors that the IRS now claims all your property.

Can the IRS take your house if its not paid off?

The IRS can seize some of your property, including your house if you owe back taxes and are not complying with any payment plan you may have entered. This is known as a tax levy or tax garnishment. Typically, the IRS will start by garnishing your wages, salary, or commission.

Will the IRS notify me if they put a lien on my property?

A federal tax lien is put into effect after the IRS: Determines your tax liability; Sends you a Notice and Demand for Payment (tax bill); and.

How often does the IRS seize property?

The IRS doesn’t publish data on how many personal residences it seizes every year. However, home seizures are rare. In fact, the seizure of homes, cars, and other personal and business assets is all relatively rare. Generally, when the IRS levies assets, it takes tax refunds, wages, and bank accounts.

Do you have a tax lien on Your House?

You could have a federal tax lien on your house, but you could also have a state tax lien or a tax lien from your county or city. There‘s also the “super lien,” which involves being behind on homeowner association fees. And you aren’t alone if you have a tax lien: In fiscal year 2012, the IRS filed over 708,000 Notices of Federal Tax Liens.

What happens if a federal lien is placed on your home?

A federal lien gives the IRS a claim on your property, so if a lien was placed on your home, you must first satisfy the lien before you can refinance or sell it. A federal lien indicates that the federal government has a stake in all taxpayers’ property, including real estate, financial assets, and personal property.

Can the IRS take property before filing a notice of federal lien?

A lien only allows the IRS to claim your property before other creditors. But it doesn’t indicate an immediate seizure of your assets. Hence, the IRS won’t take assets before filing the Notice of Federal Lien and alerting creditors and everyone else who might have a stake in your property that you owe taxes to the federal government.

How to check if IRS has a lien on your property?

Depending on the state, you’ll have to use UCC or tax lien search option and verify your identity when checking if the IRS has a lien on your property. Alternatively, you can visit the local county tax office to get more information about a federal lien placed on your property.