Can You Sell Your House with an IRS Lien on It

Yes—But Not Without the IRS Getting Involved

If the IRS has filed a Notice of Federal Tax Lien against you, it becomes a public claim on your property—including your home. This doesn’t mean you can’t sell it, but it does mean the IRS has a legal right to collect proceeds from the sale before you get paid.

The good news? There are ways to negotiate with the IRS so you can move forward with the sale—without losing everything.

In this post, we explain how IRS liens work during real estate transactions, how to protect your equity, and how to resolve your tax debt in the process.

What Happens When You Sell a Home with a Federal Tax Lien?

The IRS lien attaches to:

• Your real property title
• Any equity you have in the home
• The sale proceeds at closing

When you try to sell, your title company or escrow officer will flag the lien during the title search. The sale can’t close until the IRS is paid—or agrees to release or subordinate the lien.

Related: IRS Lien Filed Against You? What It Means and What to Do Next

Step 1: Know How Much You Owe and When the Lien Was Filed

Start by:

• Requesting a copy of the IRS lien notice (Form 668(Y))
• Ordering a title report to confirm which liens exist
• Pulling your IRS Tax Transcripts to verify balance and history

You’ll need this info to plan the sale and negotiate with the IRS.

Step 2: Evaluate Your Options

Depending on how much equity you have, there are three main options:

1. Full Pay-Off from Sale Proceeds

If your home has sufficient equity, the lien will be paid off at closing, and the IRS will automatically release the lien once funds are processed.

2. Lien Subordination

If you need to refinance or sell and repay a mortgage, the IRS may agree to subordinate the lien. This allows the sale to proceed while keeping the lien attached to any leftover proceeds.

Use Form 14134 – Application for Certificate of Subordination.

3. Lien Discharge

If there’s little to no equity after paying off mortgages, the IRS may release the lien and allow the sale to go through if you’re entering a settlement or payment plan.

Use Form 14135 – Application for Certificate of Discharge.

Step 3: Show the IRS a Resolution Plan

The IRS won’t just release the lien without a broader plan. Be ready to propose:

• A Partial Payment Installment Agreement
• A Pending Offer in Compromise
• Use of proceeds to reduce balance

Related: IRS Collection Appeals Program (CAP) vs. CDP Hearings – What’s the Difference?

Step 4: Don’t Wait Until You’re in Escrow

IRS lien processing can take 30+ days, depending on documentation and IRS backlog. If you wait until escrow opens, the sale may fall through.

Act as soon as:

• You list the home
• You get an offer
• You know a lien is present

A tax professional can help you fast-track the release or subordination paperwork.

We Help Orange County Homeowners Resolve IRS Liens Before Sale

At Boulanger CPA and Consulting PC, we help clients:

• Request lien discharges and subordinations
• Navigate escrow with lien coordination
• Resolve IRS debt before or after closing
• Avoid forced sale or equity seizure

Call (657) 218-5700 or request a strategy call at www.orangecounty.cpa

We’re local, responsive, and experienced in tax lien resolution.

FAQ: Selling a Home with an IRS Lien

Q: Can I sell my house if I have an IRS lien?
A: Yes—but the lien must be paid, subordinated, or discharged for escrow to close.

Q: How long does it take to get an IRS lien release?
A: Typically 30 days, though processing time can vary based on IRS workload and documentation.

Q: Will the IRS take all my equity?
A: The IRS may claim proceeds that remain after mortgages and senior liens are satisfied, up to the amount of the tax debt. It does not take priority over your primary lender or secured creditors.

Q: Can I negotiate a settlement as part of the sale?
A: Yes. You may submit an Offer in Compromise or other resolution alongside a lien release request.

📣 About the Author

Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.

With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.

Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.

Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.

📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.