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Can I Sell or Refinance with an IRS Tax Lien on My Property?

Posted by Brandon Keim | Dec 04, 2021 | 0 Comments

If you face an IRS tax lien on your property, you're undoubtedly in a stressful situation. Clients often ask whether they can refinance or sell their property with an existing tax lien. The good news is that you have options, and an experienced tax attorney can help.

Selling a Home with a Tax Lien

If you have a tax lien on your home, you must satisfy the lien before selling your home. However, if you have equity in your home, you can pay the lien in whole or in part from the proceeds of your home sale. How much of the lien you can satisfy will depend on how much home equity you have. If you pay your tax debt in full, the IRS will also withdraw your lien. You can pay this through a Direct Debit Installment Agreement or other payments. In some cases, your lawyer may also ask the IRS to discharge the lien if you are selling your home for less than the amount of the mortgage lien.

Refinancing a Home with a Tax Lien

If you wish to refinance, the IRS offers options for homeowners with tax liens that would normally block refinancing. You or your representatives, such as a tax lawyer or your lender, may ask the IRS to make a tax lien subordinate to the new mortgage from the refinancing bank or lender. To apply, your lawyer will need to file a Certificate of Subordination of a Federal Tax Lien. In some cases, if the IRS agrees to make the tax lien subordinate to the new mortgage and your tax debt is lower than the equity in your home, you may be able to pay your obligation to the IRS through refinancing. The closing attorney will pay taxes, fees, and the IRS lien due from the equity over the original mortgage note. 

Hire an Experienced Tax Attorney

You shouldn't risk losing your home or other property to the IRS if you're facing a federal tax lien. You need the guidance of a skilled tax attorney. If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.

About the Author

Brandon Keim

A Certified Tax Law Specialist, CPA, partner at Frazer Ryan Goldberg & Arnold LLP, and former Senior IRS Trial Attorney, Brandon Keim holds an LL.M. in Taxation from Georgetown University Law Center.

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