Can You Sell an Asset Even with a Tax Lien?

When the IRS imposes a tax lien against you, it will generally attach to all of your property. In other words, you are not allowed to sell any of your assets. In certain situations, though, you can sell an asset even with a federal tax lien filed against you. These exceptions are known as “superpriorities.”

The IRS will allow you to sell your car to a buyer who’s unaware of the tax lien. The good news is that most car buyers will have no knowledge of your lien because this detail is found neither in your car title nor your bank loan. Buyers can, however, learn about your lien if they search your local county recorder or clerk of court, which is unlikely to happen unless they are made aware that there might be a tax lien in your name.

Similar protections are afforded to securities and personal property purchased at retail. You can sell stock to a buyer who is unaware of the lien, and the stock can be transferred to his name free and clear. You are also free to sell any asset if the IRS fails to collect within the permitted timeframe, typically 10 years.

If you have any questions about the assets you can sell while a tax lien is in place, you might want to consult an IRS tax lawyer.