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In the State of Texas if a house is for closed on that has a IRS lien on it, is the lien paid out when the house is sold.

Austin, TX |

We were foreclosed on and had a federal lien on the house. Now the IRS says we still owe the amount because the lien was not paid during the foreclosure.

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Attorney answers 3

Best Answer

If the foreclosing attorney gave at least 21 days' notice to the IRS (in proper format) prior to foreclosing and the IRS did nothing to stop the foreclosure, the IRS lien on your former house was released. However, the lien was not paid (unless someone bid in more than was owed to the lender) and will attach to another house should you buy one. That is until the amount owed to the IRS is paid. So, you still owe the IRS. But there are firms who have good success in negotiating with the IRS and reducing what you owe. You should contact one.

Mr. Philo limits his practice to matters concerning real estate. By answering this question no attorney-client relationship is established. The answer is a general answer to the question posed and is based on the facts and circumstances stated in the question.


Not unless there was money over and above the amount owed to the foreclosing lender. Talk to a good tax attorney or CPA to determine if you have other options.

This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the bankruptcy code requires that we call our firm a "debt relief agency." This information is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the related issues. Nor is this advice intended to create a client - attorney relationship. Every individual's factual situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state or locality regarding specific information.


I agree with the other answers. The IRS only gets paid if there is money in the sale over and above what the mortgage company needed to pay itself off. That's highly unlikely, though not impossible. An IRS lien attaches to all of your other assets, too. Depending on how old the debts are, you may want to visit with a bankruptcy attorney and/or a tax attorney about options. It may be that either a bankruptcy or an offer in compromise could resolve the tax debt for you.

I am licensed only in Texas. Offering information of a general nature in response to a question is not intended to be legal advice in your state.

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