Can a tax lien prevent me from selling my house?

A federal tax lien does not technically prevent you from selling your house, but it significantly complicates the sale. When you have a tax lien, the IRS has a legal claim on the property. At closing, the title company will require that the IRS lien be satisfied from the sale proceeds before you receive any money. If your home equity exceeds the tax debt, the sale can proceed normally: the title company pays the IRS from proceeds, and you keep the remainder. If you owe more than the home is worth (or close to it), you may need to request a lien discharge from the IRS using Form 14135. The IRS may grant a discharge if the lien amount exceeds the property's value, if the sale will generate at least the IRS's interest in the property, or if the IRS is paid from the proceeds. A tax professional can negotiate with the IRS to facilitate the sale. Processing a discharge request typically takes 30-45 days, so plan ahead.