The answer is that a Conventional, FHA, VA, or USDA lender will NOT lend on a home with an IRS lien on the property. Robert's answer below used a great strategy (way to go, sir!) in that once it was disclosed by title that the subject property had an IRS lien, the falloff date for this particular lien must have been pretty close to the agreed upon Close of Escrow, where both sides of the transaction thought it was worth it to postpone the closing to wait & see if the lien fell off...which it did.
So, the lender would not lend the buyer on the property until after the lien was removed from the property.
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
We are a Direct Lender, Mortgage Bank where we originate, process, underwrite and fund, in-house, FHA (w/a 580 score), 203k, VA, USDA, Jumbo, Conventional, loans to Canadians, Australians & other Foreign Nationals, on time. NMLS ID 263779 | AZ BK 0903725