Selling › Every selling situation › Selling with an IRS tax lien
Selling a House With an IRS Tax Lien
A federal tax lien attaches to everything you own, including your home, and it will show up on the title search when you sell. That does not mean you cannot sell. The IRS has a process to release its lien from a specific property, even when the sale will not pay the tax debt in full.
Selling with a lien on the title?
We will build the IRS timeline into the listing and the contract so you do not lose a buyer to a missing certificate, and coordinate with your tax professional and the title company.
Book a confidential consultation Call or text (256) 808-6861
Please note: If Wyze Realty or anyone connected to us would ever be the buyer of your home, we will tell you in writing before you sign anything and show you that offer next to what listing on the open market would likely net, so you can choose.
This guide is general information, not legal or tax advice
Wyze Realty is a real estate brokerage. We are not a law firm, CPA, lender or housing counselor, and we cannot tell you what to do about your specific legal or tax situation. Laws, deadlines and programs change, and the right answer depends on your documents and facts. Work with a CPA, enrolled agent or tax attorney on any IRS application.
Nothing on this page guarantees a result, a price, a timeline or that a lender, court, agency or buyer will agree to anything. We have cited the sources we used so you can check them; statute text linked here may not be the current version.
How the lien gets there
A federal tax lien arises after the IRS assesses a tax, sends a notice and demand for payment, and the tax is not paid. It covers all of your property, including real estate, and property you acquire later. Once the debt is paid in full, the IRS releases the lien, generally within 30 days.
Your options when you sell
| Situation | Tool | How it works |
|---|---|---|
| Your sale proceeds will pay the tax debt in full | Payoff and release | Get a payoff from the IRS; the closing pays it and the IRS releases the lien. |
| Proceeds will not pay it all, but the IRS will get what its interest is worth | Certificate of discharge (Form 14135) | Removes the lien from this one property so you can sell. Common bases include paying the IRS the value of its interest, or showing its interest is worthless because the home is underwater. |
| You are refinancing, not selling | Certificate of subordination (Form 14134) | Lets a new lender go ahead of the IRS lien, usually because the refinance helps collection. |
Selling with a certificate of discharge, step by step
- Start early. IRS Publication 783 asks for the application at least 45 days before closing. Build that into your contract dates.
- Get a contract and the paperwork. The application usually needs the purchase contract, a proposed closing statement, a title report and an appraisal or valuation.
- File Form 14135. Follow the instructions in Publication 783 for where to send it and how proceeds will be handled. Some cases use an escrow of the proceeds while the IRS decides.
- Close. The IRS issues the certificate, the title company pays what the IRS approved, and the lien is released from the property.
If the property goes to foreclosure instead, the IRS must be given notice at least 25 days before a non-judicial sale and can redeem the property within 120 days of the sale or the state redemption period, whichever is longer (26 U.S.C. 7425).
State tax liens, such as those filed by the Alabama Department of Revenue, are handled separately. Ask the department for a payoff or release requirements.
Questions sellers ask
Can I sell my house if I have an IRS tax lien?
Yes. Either pay the lien from the proceeds, or apply for a certificate of discharge that releases the lien from that property. Apply at least 45 days before closing, according to IRS Publication 783.
What if my house is worth less than I owe the IRS and the mortgage?
A certificate of discharge can be based on the IRS's interest in the property having no value, which can let an underwater home be sold. A tax professional can prepare the application.
How long does the IRS take to release a lien after payment?
The IRS says it releases the lien within 30 days after the tax debt is paid in full.
Talk it through, confidentially
I have been in Alabama real estate for about ten years. Whatever is going on, the first conversation is free, private and comes with no obligation to list. If what you need is an attorney, a counselor or a CPA rather than a real estate agent, we will tell you that.
Book a confidential consultation Call or text (256) 808-6861
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Sources (viewed October 2026): IRS, Understanding a federal tax lien; IRS Publication 783, Certificate of Discharge; IRS Publication 784, Certificate of Subordination; 26 U.S.C. 7425.
Disclaimer: This page is general information about Alabama and federal rules as we understood them in October 2026. It is not legal, tax, financial or credit advice, and it may not reflect the current law or your situation. No result, price, timeline or approval is guaranteed. Consult an Alabama attorney, a CPA or a HUD-approved housing counselor about your situation. Wyze Realty, (256) 808-6861.