IRS Liens On Houses - How do you avoid them or get them off? Fresno CA

Services for Real Estate Pros with Serna Tax Solutions, LLC

Yes, the IRS can and will put a lien on your house.  No, they don't even have to tell you.  It happens automatically when you owe them money.  Here is what you need to know about house liens, how they happen, how to avoid them, and how to get a lien on your house removed if you need to sell it. 

The IRS will put a lien on your assets (usually affect the house the most, but ti does apply to all assets) when you owe them more than $10,000.  This lien happens automatically 10 days after they send you the "Demand for Payment" notice.  They do not have to notify you or anyone else of the lien.  It happens automatically. This is often known as the "silent lien". 

Unless dealt with, the lien automatically lasts for 10 years (there are things that can extend this) and is auto released after that amount of time. 

If nothing is done after the lien is issued, then the "Notice of Lien" is sent out from the IRS.  This is the one that notifies you, the county, and all of the lien notice head hunters that your home now has a lien on it.  Often, the first time someone is aware that their home has an IRS lien against it is when they start receiving all of the letters from the businesses who purchase lien lists from the county and then send out letters to help you deal with it.  

The good news is that just because you have a lien on the house, doesn't mean that you cant sell it.  Here are some of the ways to get around it:

-Discharge - you can petition the IRS to discharge your home asset from their lien list when something is going to happen that will allow the IRS to get paid.  For example, say you want to refinance the house in order to pay off debts.  The IRS can be petitioned to allow you to refinance if they will get paid in the refi, or if by refinancing, you will have a lower monthly house payment and therefore have more money each month to pay into your monthly IRS installment agreement (debt payment agreement). 

-Subordination - this is when the IRS will subordinate to another creditor in order to allow you to sell the home, and get paid from the proceeds. 

-Withdrawal - this is significantly more difficult to get them to agree to, but you can sometimes petition the IRS to withdraw their lien on the house in order for you to sell it if you agree to certain installment agreement terms in order to pay off your past IRS debt. 

As a side note, often times, people with a lien on their home will have a difficult time dealing with bankers and their home mortgage, because the IRS sends out a new notice every time the lien amount is increased.  Say, for example, you we the IRS $10k each year for 5 years.  You owe the IRS a total of $50k.  Well, the way that the IRS notifies you is that the first year, they send a lien notice for $10k, the second year for $20k, the 3rd year for $30k... etc.  By the end of it, if someone doesn't know what they are looking at, they might add all 5 of those letters up and interpret that you actually owe $150k!  Sometimes the easiest way around that is then to go back to the IRS and get a payoff statement to prove to the banker the correct number. 

Have an issue with a home lien, or need help getting one modified so that you can sell the house?  Give me a call or shoot me an email and lets discuss some options:

Sabrina Serna, Serna Tax Solutions, LLC 


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