One of the things that makes an IRS tax lien such an effective weapon is that it significantly affects an individual's ability to sell off his assets. If, say, you owe a huge back tax bill to the government, the IRS can choose to attach a $100,000 lien to your home—whether you own your home outright or whether you're still paying the mortgage. What this means is that, if you sell your home, you'll have to kick back $100,000 of the proceeds to the IRS in order to have the lien discharged, which is not an attractive option for someone trying to dig himself out from under a mountain of debt.
In rare cases, it may be possible to sell your home with the tax lien still attached, especially if a third party sees your property as a good investment. As a general rule, no bank will provide financing to purchase a house that's under a tax lien, but there's nothing to prevent the interested party from making an all-cash bid. What they're gambling on, of course, is that the house is undervalued enough for them to assume—and pay off—the lien, and then re-sell the entire property at a profit (or fix it up and move into it themselves).
In this economy, though, if you own a suburban home that's encumbered with a significant tax lien, your odds of making a cash sale (and transferring the tax debt to another party) are slim to none.
Tax liens are a complicated business. If you have any questions about the tax lien on your home in Tulsa, Norman, or Oklahoma City, call the experienced Oklahoma City tax attorneys at Travis W. Watkins, PC for a free consultation today! Reach us through the online contact system, or call us toll-free at 800-721-7054.