Can I Do A Short Sale If I Have An IRS Lien?
The quick answer: YES! Tax liens are negotiable. The taxes eventually have to be paid, but these taxes can be "subordinated" in order to close on a short sale.
Here’s how it works. Federal tax liens are recorded against an individual and any properties he or she has. If a seller has a federal tax lien recorded against him or her, this lien jumps ahead of all other liens on the property.
However, it may not have to be paid off in order for a short sale to go through. The way to do it is called a “subordination of lien” so that the government will allow the short sale to go through. Visit IRS website at http://www.irs.gov to find more information. They have lots of good information on how to get a subordination or discharge so you can move forward with listing your house and avoiding a foreclosure. This is one of those occasions where the government is willing and able to help!