A tax lien isn’t a joke. The IRS isn't pulling a prank on you, and telling you that your property is about to be seized isn’t their idea of a good time. 

The IRS says if there is a federal tax lien on your home, you are required to satisfy it before you can sell or refinance.  The presence of other types of liens can make a home sale challenging, too. While it is possible to sell your home when you have a lien against the property, you are much better off paying your tax debt or other lien debt. 

If you had trouble scraping up enough to pay your taxes in full, you might have heard from the federal government already. Understanding tax liens can be confusing, so we've put together answers to some of the most frequently asked questions to help you navigate this complex topic with confidence.

Have you received IRS Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320? That means the IRS has determined you owe a tax debt, which you have neglected or failed to pay. Now they put a lien on your property so you can’t sell or refinance any of it until you pay up or make a deal.

The IRS uses a variety of collection activities to collect what taxpayers owe to the government. Among these tactics, a federal tax lien can be among the most difficult with which to cope. 

The IRS has a legal right to use extraordinary means to collect money owed to the federal government. When you forget or simply choose not to pay your tax debt, you expose yourself to these collection activities that could compromise your financial security. 

Federal liens are just like any other form of defaulted financial obligation in the damage they can do to your credit rating. Unlike unpaid medical bills, credit cards, car loans, and other expenses, IRS collection efforts can vary in how long they are reported by the government and stay on your record. You can take the necessary precautions now to protect your rating and record by discovering the full impact that comes with an IRS tax lien.

Having an IRS tax lien on your credit record can be devastating. Because it can stay on your record up to seven years after you pay off or settle the amount, you may have a difficult time getting financed for loans, credit cards, and other financing.