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 several options to satisfy the tax lien. According to IRS.gov, 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 restructuring to assist taxpayers during this economic downturn. To assist struggling taxpayers, according to IRS.gov, the IRS plans to significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, liens are automatically filed at certain dollar levels for people with past-due balances. The IRS plans to review the results and impact of the lien threshold change in about a year (around late 2018). Also, the IRS is making other fundamental changes to liens in cases in which taxpayers enter into a Direct Debit Installment Agreement (DDIA), according to IRS.gov. Additionally, the IRS will modify procedures that will make it easier for taxpayers to obtain lien withdrawals. Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. A tax levy will be issued when the federal government seriously considers the tax lien. This will grant the government the 9
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