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What Happens When The IRS Puts A Lien On My House?

If the IRS believes that you are unlikely to be able to pay off your tax debt within the 10-year statute of limitations for payment, it may take steps to secure that debt by placing a lien on your home.

This is not the same as the IRS taking your property, but once a lien is in place, you will have trouble refinancing your home, and if you’re able to sell it, the proceeds from the sale will go to the IRS for payment of the debt.

There are ways around tax liens, and there are ways to get rid of them once they’re in place. The most obvious choice would be to pay your tax bill in full, but that’s not an option available to many people who’ve lost a job or experienced other financial dislocation from one tax year to the next.

Often, if you agree to an installment payment plan with the IRS, the lien can be withdrawn.

There are limitations on this approach as well, so it may not work for all taxpayers.

Another choice, if you have enough equity in the home to pay off the debt, is to sell.

You won’t walk away with much in the way of profit, but the debt will be cleared and the lien finished.

There are more options besides. If you’re concerned about the impact of a tax lien on your home or other property, the attorneys at Zelenitz, Shapiro & D’Agostino can help. Call us today at 718-599-1111 for a free consultation.