Usually the IRS will file a tax lien when your taxes owed are $10,000 or more. It usually occurs a month after the IRS accepts your return. Can you pay the back taxes owed in full or will you have to do a payment plan? If they file a tax lien before you close, you probably won't get approved.
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They moved pretty quickly on me in 2005. I filed and a month later got the enormous $10,000 bill in a month and called to setup a payment plan. After they setup the payment plan they said oh, and we are going to have to file a lien. At that time I had 2 BKs on my credit report and I told them a tax lien would be utterly devastating. They told me sorry but if it is $10,000 or more, we have to file a lien. I said ok. Next thing that happened was NO LIEN! Someone there had mercy on me! So I finally pay the remaining balance off this year with my tax refund. So the timeframe probably varies from 1-4 months after you file depending on when you get your bill and when you call them.
Interesting! I didn't know the rules changed. That is great news for the OP but there is still the question on how the lender will view that large sum of debt to the IRS.
Good info so far. I didn't even think of a lien! Oh my. I need to file my 2012 taxes before putting in for a mortgage just because we had such a great year, the income amount shown will help a lot. So applying before filing taxes is not an option. So the thing is, the lender looks at my returns, but do they see I still owe??? I don't like the idea of filing on April 15, applying for mortgage a few days later and hope the unpaid bill doesn't show up until after I close. I'll prob have to break payments up over a few monthswhich will prevent me from applying until late 2013 instead of this spring. I was hoping lender would just see I filed and not that I still had a balance 
Bummed i let this happen to me
@GPMDRL wrote:Good info so far. I didn't even think of a lien! Oh my. I need to file my 2012 taxes before putting in for a mortgage just because we had such a great year, the income amount shown will help a lot. So applying before filing taxes is not an option. So the thing is, the lender looks at my returns, but do they see I still owe??? I don't like the idea of filing on April 15, applying for mortgage a few days later and hope the unpaid bill doesn't show up until after I close. I'll prob have to break payments up over a few monthswhich will prevent me from applying until late 2013 instead of this spring. I was hoping lender would just see I filed and not that I still had a balance
I wish I could say that was the case but in reality, the underwriter looks at every number on every document you give them. They comb through it very thoroughly and then write their conditions that must be satisfied for approval. I don't know what the condition might be if they have concerns with a high debt owed on one of your IRS tax returns. You usually have to go back 2-3 years.
Couldn't you close before you file? In other words, go on contract very soon? All you need to give them is the W2 or the form for self-employed income for last year to get approved for a higher amount or some other proof of income (bank deposits?). In my case, I am in underwriting right now and they didn't ask me for 2012 return because I haven't filed it yet but they are using the income from salary for last year based on my year end paystub...I'm still waiting for my W2's to come in the mail. What I wrote is not definitive...just throwing out ideas.
