My team had a REO listing last year that had a $65K tax lien on it - gorgeous house, appraised @ $550k - listed at $350k. The bank had to fight it out with the IRS, even had to "reforeclose" on the property. After 18 months - 4 buyers who gave up, we finally closed. It was given to the new buyers each time though, if they wanted to relieve the tax burden............rightfully so, none of the buyers took that option up to clear the title.
All the best on getting this resolved. Patience is going to be your best path!
Lipsey/Shaner Team, LLC