The California FTB is accepting requests from taxpayers who have short sold their home and do not have enough funds in escrow accounts to pay the recorded state tax lien in full.
Taxpayers in this situation may apply for a Partial Release of Lien, which releases a specific piece of property from a recorded state tax lien. However, it does not release the lien in its entirety. The lien remains in effect against the taxpayer and continues to encumber other property the taxpayer owns or acquires in the future.
Your agent should know, way before the escrow is about to close, if there are any tax liens against the property. But, it is possible to have it taken off the home, complete the short-sale and move on....but, with the lien still on just you.