Why a lien stops your closing
A federal tax lien is the IRS's legal claim on your property for unpaid tax. Because the IRS takes first position, a new lender can't safely lend against the home, and a title company can't give clear title to a buyer. Nothing funds until the IRS issues the right certificate: a release, a subordination, or a discharge.
Three common situations
Buying a home · Mark's story
Mark was buying a $450,000 home and had put down a $15,000 deposit. Five days before closing, the title search found an $18,000 IRS lien.
The fix: Form 668(Z) — Certificate of Release of Federal Tax Lien
Once the balance is settled or an approved plan is in place, the IRS issues the release certificate, and his $380,000 loan can fund.
Refinancing to a lower rate · Sarah's story
Sarah wanted to refinance her $280,000 mortgage and save $420 a month. A $25,000 IRS lien blocked the new loan.
The fix: Form 14134 — Certificate of Lien Subordination
Subordination lets the new lender take first position while Sarah keeps making her IRS payment plan.
Selling a home · David's story
David was selling his home for $320,000 with $95,000 in equity. A $35,000 IRS lien turned up before closing.
The fix: Form 14135 — Discharge of Property from Federal Tax Lien
Discharge lets the lien be paid from the sale proceeds held in escrow, so the sale closes and David keeps the rest.
Examples are illustrative; names and figures are representative.
Normal wait vs. expedited help
Going it alone
30–60 days
With Enrolled Agent help
1–2 days
Timing depends on your case and IRS processing; 1–2 days is typical for prepared, eligible requests, not a guarantee.
What to have ready
- Any IRS letters or the lien notice (often Form 668(Y))
- Your purchase, sale or refinance contract and the closing date
- Lender or title company contact, and their payoff or title report
- Recent IRS balance or payment plan details, if you have them
- A photo ID and your last filed tax return
Written by Aruna Surapaneni, EA
Licensed by the U.S. Treasury to represent taxpayers before the IRS in all 50 states.