Can a tax lien be used to seize your home?
- David Greene
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No, the IRS will not seize your home as a result of this Lien. They would have to start a legal proceeding to reduce the lien to a judgment. However, this lien does affect your property. You can think of a lien in terms of a mortgage. A mortgage is an encumbrance on your property that gives the public notice that you owe the bank money. If you do not pay the bank, it can start legal proceedings, called foreclosure, to take your home. Otherwise, the mortgage just “sits” at the courthouse and no action flows from it. In the same way, when an IRS lien is filed, it gives public notice that you owe the government taxes that you have not paid. This creates a “cloud” on your title. If you decide to sell your home, the closing attorney will search your title and when he finds the lien, it is notice to him that the IRS must be paid from the proceeds of the sale before you can get any money. This filing also negatively affects your credit rating. The fact that a lien has been filed is a warning that a levy may follow, which is much more serious.