Yes, You Can Sell a House Even With a Federal Tax Lien

By
Industry Observer with Redden Law 391899

I am Michael Redden and I'm a tax attorney in Minneapolis, MN.  I represent taxpayers in front of the IRS and state level tax authorities across the United States.  My clients have tax debts, audit issues,  and other controversies with the IRS.  One of the most commeon misconceptions is that you can't sell your home if you have an IRS tax lien.

If you owe more than $10,000 to the IRS, the IRS will file a Notice of Federal Tax Lien in the local land records.  They will also file it with your Secretary of State and even, sometimes, city hall.  This lien can make it difficult to sell your home, but only because so few people really understand them.  The IRS files these liens because the statistics show that they will get them paid.

 

The IRS will discharge your home from a Federal Tax Lien if it increases the chance that they will be paid.  Additionally, they will often subordinate a Federal Tax Lien to a new mortgage allowing you to refinance if the new mortgage makes it more likely that you can pay your taxes.  The state of Minnesota and other states also file their own notices for tax liens.  Many states also will work with you regarding a lien also.

In some cases, the IRS will even WITHDRAW the lien.  It all depends on your financial situation and if you meet some stringent guidelines.  If you know that you have a Federal Tax Lien, it is often better to start working with the IRS before you put your home on the market or before you try to refinance.

 

But, even if the lien first comes up after you've signed a purchase agreement, it is still possible to work things out and complete the sale.  If you or someone you know has an issue with a state level or Federal Tax Lien they can call me at 763-515-0478 or email me at mredden@reddenlawoffice.com.

 

 

Michael Redden

Attorney at Law

Redden Law, PLLC

12800 Whitewater Dr.

Suite 100

Minnetonka, MN 55343

Ph: 763-515-0478

Email: mredden@reddenlawoffice.com

 

Comments (1)

Kristin Johnston - REALTOR®
RE/MAX Realty Center 262-567-2455 - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and have a wonderful day!

May 26, 2021 06:57 AM