“I don’t want to go into details, but for a number of reasons, our financial situation had really gotten out of hand,” Megan R., who lives outside of Worcester said. “There were some medical expenses; my husband’s start up never actually succeeded…we needed a lot of money, and we needed it fast. The real estate market is finally picking up, so I took a deep breath and said, ‘Honey, I think it’s time we sell the house.’”

Megan sighed. “That’s when my husband looked at me and said, “We can’t sell the house.”  Megan had little suspected that her husband was keeping a big secret from her: the couple owed the IRS nearly $100,000 in back taxes. The situation was so dire that the IRS had placed a lien on their home. “Until that lien was taken care of,” Megan said, “we couldn’t sell the house!”

What Is A Tax Lien?

The IRS and Massachusetts Department of Revenue are in the business of making sure you pay your tax debt. If you don’t, they have a number of harsh and effective tools to use to force you to pay up. A tax lien is one of those tools. Basically, a tax lien is a written legal claim against your property notifying the public that you owe a tax authority – either the IRS or the Massachusetts Department of Revenue – some taxes that you haven’t yet paid.

A tax lien attaches to your property and clouds the title. Until your tax issue is resolved, no one can buy the property without the lien attached. Any time a potential buyer does a title search – a basic part of the home buying process, and one that all mortgage companies insist on – the lien is revealed. Buying the property means buying the tax debt – and that’s something very few home buyers (and no mortgage companies!) are willing to do.

What Can Be Done About A Tax Lien?

There is a lot of misinformation floating around on the internet about the best way to handle a tax lien on your property. The truth is that every tax problem is unique, and there’s no one-size fits all solution.

Your best choice is to connect with a CPA who works solely on solving tax problems for expert advice and guidance. Don’t try to face the IRS on your own. A knowledgeable Massachusetts tax expert can work with the IRS or Massachusetts Department of Revenue to find a solution to your tax problem.

 It may even be possible to reduce the total amount of tax you need to pay through a mechanism known as an Offer in Compromise.  When you’ve paid off this reduced debt, the IRS will release the lien, and then you’re free to sell the property.

Don’t give up hope! Every tax problem has a solution.  But you have to take action! Tax liens don’t go away on their own.  If you’re ready to get your life back, and be able to sell your property the way you want to, your tax situation needs to be addressed.  The time is now!