Facing Collection
Tax Lien
A federal tax lien is the IRS's legal claim against everything you own — your home, car, bank accounts, and business assets. It does not take your money directly. But it blocks you from selling, refinancing, or borrowing against anything you own until the debt is resolved.
A lien is different from a levy. A levy takes money. A lien secures the government's position — it is the step before the levy, and it stays on your record as a public document until removed.
Situation 1 — Trying to refinance: You owe $22,000 to the IRS and have $180,000 in equity in your home. You try to refinance to lower your monthly payment. The lender finds the federal tax lien in the title search and refuses. You cannot refinance — or sell — until the lien is addressed.
Situation 2 — Applying for a business loan: You need a $50,000 equipment loan for your business. The lender pulls your credit and finds the Notice of Federal Tax Lien filed with the county. Rejected. The lien signals unresolved federal debt and most lenders will not lend against encumbered assets.
Situation 3 — Selling your home: You are under contract on a home sale. Title company runs a lien search and finds the IRS lien. The IRS has legal priority over the sale proceeds. Your closing is delayed or falls through until the IRS lien is paid from the proceeds or a lien discharge is negotiated.
The IRS does not need your permission or a court order to file a lien. The process is:
Your tax balance is officially recorded in IRS systems. This happens after a return is filed, an audit concludes, or the IRS creates a Substitute for Return.
The IRS sends a bill. If you do not pay within 10 days, a lien legally attaches to all your property — even before it is filed publicly.
Once the IRS files the NFTL with your county recorder, it becomes a public record. This is when it appears in property searches, title reports, and credit reports. Other creditors are now on notice of the IRS's priority claim.
You receive a CP90 or similar notice. By this point, the lien is already on file. The notice is after the fact.
Pay the full tax balance and the IRS must release the lien within 30 days. Form 668-Z (Certificate of Release) is filed with the same county recorder where the lien was recorded.
The IRS can withdraw a lien even before full payment under specific circumstances. Withdrawal removes the public notice — as if it was never filed:
Use Form 12277 (Application for Withdrawal) to request lien withdrawal.
If you need to sell or refinance a specific property, you can apply for a Certificate of Discharge to release the lien from that property specifically — without paying the full balance. The IRS must agree the sale price is fair and that their interest is protected.
If you need to refinance, you can ask the IRS to subordinate (lower) their priority position — allowing a new mortgage or loan to take first position. The IRS gets paid from the refinancing, and the new lender gets priority on the balance.
After the 10-year collection statute expires, the lien automatically becomes unenforceable. The IRS files a Certificate of Release within 30 days of expiration.
The IRS files a lien to establish its legal position and protect its interest. A levy — which actually takes money — typically follows. Once you have received notice of a federal tax lien, the IRS is actively moving toward seizure of assets.
Acting before a levy is issued gives you far more options. After a levy, the IRS has already seized funds — getting them back requires proving hardship or error.
Request a collection hold immediately — Stops any follow-up levy action while you work out a resolution. The lien stays in place but further seizures are paused.
Evaluate your property situation — If you need to sell or refinance in the next 12 months, discharge or subordination may be urgent. Start the application process early — it takes 6 to 8 weeks.
Check your balance and payment options — Setting up a Direct Debit installment agreement for balances under $25,000 can qualify you for lien withdrawal even before full payment.
Consider an Offer in Compromise — If you cannot pay the full balance, an OIC settles for less and the lien is released upon acceptance and payment of the offer amount.
Related: IRS Property Seizure · Offer in Compromise · Stop an IRS Levy
Our tax professionals can contact the IRS today and request a hold on collections while we review your situation.
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Levies & Garnishment