Q: If I owe the IRS back taxes, will they file a lien against my house?
A: Generally, yes. It depends on how much you owe, how many tax years are involved and certain other variables. Also, a federal tax lien attaches to all property, houses, cars, bank accounts, paychecks, 401k accounts, etc…
Q: If the IRS filed a lien against me, can I still sell my house?
A: Yes, either the sale proceeds will pay off the lien, or the IRS will remove the lien if the proper application is made and sufficient proceeds paid to the IRS.
Q: When can the IRS file a lien?
A: The IRS does not actually file “liens.” A lien for back taxes owed arises after three things occur. One, a tax assessment is made against a taxpayer; two, a notice demanding payment of that assessment is sent to the taxpayer; three, the taxpayer refuses or neglects to pay that notice. Once these three things occur, the IRS has a lien on all the taxpayer’s property. The IRS does file a Notice of Federal Tax Lien in the public record. The purpose of this notice is to alert other creditors that an IRS lien interest in the taxpayer’s collateral.
Q: Does an IRS lien expire?
A: Yes. The IRS has ten years to collect delinquent taxes by levy (seizing things like bank accounts or cars) or by filing suit in federal court. Once that ten year period has run out, the IRS has thirty days to release the lien.
Q: Does the IRS ever have more than ten years to collect delinquent taxes?
A: Yes. Many actions toll or suspend the running of that ten year “clock.”