Can the IRS Take Your Home if You Owe Back Taxes?
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The IRS can legally take your home if you owe back taxes. But this is rare and typically a last resort. Before taking your home, the IRS will try to collect through tax liens, wage garnishments, bank levies, and tax offsets. If the IRS does move to seize your home, they must follow strict legal procedures, including court approval and giving you notice with a chance to appeal. You can stop home seizure by requesting a hearing, setting up a payment plan, filing Form 911 with the Taxpayer Advocate Service, or considering bankruptcy.
Written by Mae Koppes. Legally reviewed by Attorney Andrea Wimmer
Updated March 20, 2025
Table of Contents
Can the IRS Take My House if I Owe Taxes?
Yes, if you owe the IRS (Internal Revenue Service) taxes and don’t pay, it has the legal authority to seize your home. However, this is a last resort. The IRS prefers to collect unpaid income tax through tax liens and tax levies on liquid assets, including wages and bank accounts. If you’ve received a tax bill or had a tax return offset to cover back taxes, these are signs the IRS is attempting to collect your debt.
👉A tax offset occurs when the IRS applies your tax refund to unpaid debts, such as back taxes, federal student loans, or child support, instead of issuing the refund to you.
That said, if your tax debt remains unpaid, the IRS can take your home, even if you have a mortgage. They must follow strict legal procedures before doing so.
What Else Can the IRS Seize for Back Taxes?
If you owe the IRS, they can seize several types of assets, including:
Wages: The IRS can take a portion of your paycheck through a process called wage garnishment.
Bank Accounts: The IRS can freeze and withdraw money from your bank account with a bank levy.
Tax Refunds: The IRS can apply your federal or state tax refund to your debt.
Vehicles and business assets: The IRS can seize personal property like cars, trucks, or business property.
Real estate: If other collection methods fail, the IRS can seize your home, land, or other real estate you own.
How the IRS Collects Unpaid Taxes
If you don’t pay your taxes, the IRS will send you multiple notices as part of its collection process before taking any collection action. If you continue not to pay, the IRS can use two main tools to collect:
Tax Lien: A tax lien is a legal claim against your property. It doesn’t mean the IRS takes your home, but it does mean they have a right to THE proceeds if you sell it.
Tax Levy: A tax levy allows the IRS to take property to satisfy your tax debt. This could include garnishing wages, taking money from your bank account, or seizing and selling your home.
While a lien can make it harder to sell or refinance your home, a levy is the more serious action because it means the IRS is actively taking property to cover your debt.
Will the IRS Really Take Your Home?
Although the IRS has the power to seize homes, it happens very rarely. In the U.S., the IRS seizes only a few hundred homes each year. That’s because home seizures are expensive, time-consuming, and often don’t bring in enough money to justify the effort.
Instead, the IRS typically focuses on liquid assets. In other words, things that can easily be turned into cash like wages, bank accounts, and tax refunds.
That said, if the IRS garnishes your wages or empties your bank account, you might struggle to make mortgage payments. That could put your home at risk of foreclosure by your mortgage lender, not the IRS.
How the IRS Seizes a Home Using a Tax Levy
If the IRS does decide to seize your home, it must follow strict legal procedures, including:
You must owe more than $5,000 in back taxes.
The IRS must get court approval from a federal judge.
You must receive several notices before the IRS moves forward.
The IRS must post a notice of seizure at your home.
Even if these conditions are met, if the home is jointly owned but only one spouse has tax liability (owes the IRS), seizure may be more complicated. In general, the IRS won’t seize a home if one of the owners isn’t responsible for the tax debt. The Internal Revenue Code outlines specific rules for how jointly owned property can be affected by tax debt.
After seizure, the IRS will auction the home for fair market value. If the auction brings in more money than you owe, you’ll receive the excess funds. However, if the home sells for less than the amount owed, you could still be responsible for the remaining balance.
Right of Redemption: Can You Buy Your Home Back?
If the IRS seizes and sells your home, you may still have a right of redemption. This allows you to buy back your home from the buyer by paying the full auction price plus 20% interest within 180 days of the sale.
What Happens if the IRS Puts a Lien on Your Home?
Instead of seizing your home, the IRS may place a federal tax lien on it. A lien doesn’t mean the IRS takes your home. It just means they have a legal claim to it. If you try to sell or refinance, the IRS will be paid from the proceeds before you receive any money.
If you want to remove a tax lien without selling your home, you can:
Pay the tax debt in full and the IRS will release the lien within 30 days of full payment.
Set up an installment agreement, which is a payment arrangement where you agree to repay your tax debt over time. (Note this doesn’t always work.)
Request a lien subordination, which allows another lender (like a mortgage company) to take priority over the IRS lien, making it easier to refinance your home.
Can the IRS Take Your House If You Have a Mortgage?
Yes, but it’s complicated. The IRS can seize and sell your home even if you have a mortgage. However, when they auction the property, the mortgage must be paid first before the IRS gets any money.
Because most primary residences have a mortgage, the IRS may decide it’s not worth the effort to seize the home if there won’t be enough left to cover the tax debt. However, unresolved tax problems can still result in liens or other collection actions.
Can the IRS Seize Jointly Owned Property?
If you own a home with your spouse but only one of you owes taxes, whether the IRS can take the home depends on state law and whether both spouses are liable for the debt.
If you live in a community property state (such as California or Texas), both spouses may be responsible for tax debt, even if only one spouse earned the income. In this case, the IRS can seize jointly owned property.
If you live in a common law state, the IRS usually can’t seize a jointly owned home if only one spouse owes taxes — unless they determine the other spouse has some responsibility for the debt.
How To Stop the IRS From Taking Your Home
If you’re facing tax issues and are at risk of losing your home to the IRS, you have options. Many people consult a tax attorney to understand their rights and explore solutions like payment plans or offers in compromise.
Here are some options to consider:
Request a collection due process (CDP) hearing
Set up a payment plan with the IRS
Contact the Taxpayer Advocate Service (TAS)
File for bankruptcy
Request a Collection Due Process (CDP) Hearing
Before the IRS levies your home, they must send a Final Notice of Intent to Levy (also known as a 1058 letter or LT11). This letter gives you the right to request a CDP hearing with the IRS Appeals Office.
At this hearing, you can:
Challenge the tax debt amount, argue that home seizure would cause economic hardship, and assert your right to a hearing before the IRS takes further action.
Request a payment plan.
Argue that the home’s sale won’t generate enough money to satisfy the debt.
Claim Currently Not Collectible (CNC) status, if paying the debt would cause financial hardship.
If the IRS places you in CNC status, they won’t collect from you while your financial situation remains unchanged.
Set Up a Payment Plan
You might be able to stop the IRS from seizing your home by arranging a payment plan, such as:
Installment Agreement: A monthly payment plan that allows you to pay off your tax debt over time.
Partial Payment Installment Agreement (PPIA): Similar to a standard installment plan, but you don’t have to pay the full amount owed.
Offer in Compromise (OIC): A settlement where you pay less than you owe, but the IRS must agree that you can’t afford to pay the full amount.
For more information on each of these read our IRS tax debt guide.
File Form 911 With the Taxpayer Advocate Service
If losing your home would cause extreme financial hardship, you can file Form 911 with the Taxpayer Advocate Service (TAS). This may temporarily stop the seizure while the TAS reviews your case. If your request is denied, you can appeal the decision in U.S. Tax Court.
File for Bankruptcy
Bankruptcy can temporarily stop the IRS from seizing your home by triggering an automatic stay, which halts collection efforts. Depending on the type of bankruptcy you file, it could also help manage or eliminate tax debt:
Chapter 7 Bankruptcy: Can discharge older tax debts, but won’t remove tax liens that were already placed on your home.
Chapter 13 Bankruptcy: Allows you to set up a payment plan to catch up on missed payments, which can prevent a home seizure.
If you’re considering bankruptcy, it’s a good idea to talk to a bankruptcy attorney to understand how it would affect your specific situation.
Let’s Summarize…
Yes, the IRS has the legal authority to seize and sell your home if you owe back taxes, but this is very rare. The IRS usually focuses on easier collection methods, such as garnishing wages, levying bank accounts, or placing tax liens.
If you’re at risk of losing your home, you have options. You can:
Request a CDP hearing to challenge the levy.
Work out a payment plan or settlement with the IRS.
File Form 911 with the Taxpayer Advocate Service.
Consider bankruptcy, which can stop the seizure and help manage tax debt.
If the IRS is threatening to seize your home, consider speaking with a tax professional or bankruptcy attorney to understand your best course of action.