If you owe the IRS or a state for overdue taxes and the amount is over certain limits, it is likely that they will file a tax lien through the county in which you live. This tax lien does not mean you cannot sell your home or other real estate; in its simplest form, it means that the IRS or other taxing authority takes your place in line when the real estate is sold. If you have a mortgage, the mortgage holder gets paid first. The same is true with a second mortgage holder. The IRS or other liens holder then would step into your place. Any funds that would ordinarily go to you would first go the taxing authority lien holder.
These sells do require a little extra planning time. You, your closing attorney or tax accountant needs to contact the IRS or other taxing authority to obtain a lien payoff letter prior to the closing. It may take up to 30 days to obtain the payoff letter.
For more information, please contact:
James Robertson, james.robertson@frazierdeeter.com