If there is a federal tax lien on your home, you must satisfy the lien
before you can sell or refinance your home.
There are a number of options to satisfy the tax lien. Normally, if you
have equity in your property, the tax lien is paid (in part or in whole depending on the equity) out of the sales proceeds
at the time of closing. If the home is being sold for less than the lien amount, the taxpayer can request the IRS discharge
the lien to allow for the completion of the sale.
Taxpayers or lenders also can ask that a federal tax lien be made secondary
to the lending institution's lien to allow for the refinancing or restructuring of a mortgage.
The IRS currently is working to speed requests for discharge or mortgage
restructing to assist taxpayers during this economic downturn.
