Need to sell or refinance a home with an IRS tax lien or North Carolina Department of Revenue tax lien? Many clients who come into my Raleigh, NC office assume that they cannot sell or refinance a home with a tax lien or judgment unless the underlying debts are paid in full. Contrary to popular belief, a home can be sold or refinanced when tax liens and judgments have been filed against a property even if the debts are not paid in full. A house with a tax lien can be sold whether utilizing a traditional real estate professional or an online broker such as Opendoor.
The main focus of my CPA practice is income tax representation for individuals facing issues with the IRS or the North Carolina Department of Revenue. As such, I often work with sellers, real estate agents, and real estate attorneys to resolve tax lien and judgment issues so that homes can be successfully sold. Below are some important factors to consider when selling a home with a tax lien or judgment.
What is a Tax Lien?
An IRS or North Carolina Department of Revenue tax lien is created automatically whenever a taxpayer has an outstanding tax debt. However, the tax lien doesn’t become a matter of public record and filed at a local courthouse until certain requirements are met regarding the age and amount of the tax debt. An IRS or NCDOR tax lien attaches to property owned by the taxpayer and will prevent the successful sale or refinance of a home until the tax lien is removed.
How to Get an IRS or NCDOR Tax Lien Removed
Assuming the IRS or NCDOR tax lien was filed properly in the first place, there are a few ways to get a tax lien removed enabling the sale or refinance of a home. Essentially, a seller must be able to demonstrate that it is in the best interest of the United States Government or the State of North Carolina to remove the lien. This is typically achieved when the lien withdrawal or release would enable funds to be obtained through refinance or sale of the property so that proceeds can be paid towards the tax debt. In many cases, the debt may not be paid in full and in some cases not at all. Note that the request to have a tax lien withdrawn generally takes at least 30 days; therefore, it is important plan accordingly.
Please feel free to contact me if you or someone you know in the Raleigh, NC area needs help with resolving IRS or NCDOR tax lien issues. I can be contacted by phone at (919) 792-8511 or you can email me directly using this link.
Lauren Massie, CPA, PLLC
8480 Honeycutt Road, Suite 200
Raleigh, NC 27615
Lauren Massie, CPA, PLLC serves clients in North Carolina throughout the Greater Triangle Area including cities such as Raleigh, Wake Forest, Cary, Durham, Chapel Hill, Hillsborough, Youngsville, Franklinton, Morrisville, Garner, Knightdale, Zebulon, Angier, Clayton, Louisburg, Henderson and Wendell.