Is an IRS lien a superior lien?

A mortgage lien is always the superior lien on a property and an IRS lien does not trump the mortgage lender’s right to recover a defaulted home loan through foreclosure. Thus, the IRS may foreclose on and seize the property but must pay the mortgage lender the remaining amount owed on the mortgage when doing so.

What type of lien is a specific lien?

Specific liens are typically voluntary liens. Voluntary liens are placed on the subject property with the consent of the owner. This is usually done through the loan documents (mortgage and promissory note). The property owner voluntarily creates a debt, which results in a voluntary lien.

Can a federal tax lien have priority over previous liens?

A federal tax lien is serious stuff, as it gives the IRS the right to repossess your property. It does not, however, have priority over previously recorded liens.

How is a tax lien different from a levy?

The IRS puts liens on all types of property, including real estate. A federal tax lien differs from an IRS levy, which is the actual seizure of the property and eventual sale to pay off your tax debt to the IRS.

What does it mean to subordinate a federal tax lien?

“Subordination” does not remove the lien, but allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage. To determine eligibility, refer to Publication 784, Instructions on How to Apply for a Certificate of Subordination of Federal Tax Lien PDF and the video Selling or Refinancing when there is an IRS Lien.

When does the IRS put a lien on your property?

The Internal Revenue Service has the right to place an immediate blanket lien against all the property you own – including real estate – if you fail to pay your overdue taxes within 10 days after the IRS has demanded them. A federal tax lien is serious stuff, as it gives the IRS the right to repossess your property.