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Lien Discharge

A “discharge” removes the NFTL from a specific property; however, the lien remains attached to all other property and future rights to property.

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Notice Overview

A federal tax lien arises automatically if you don’t pay the amount due after receiving your first bill. The government also may file a Notice of Federal Tax Lien (NFTL) in the public records. This notifies creditors the IRS has a claim against all your current and future property and rights to property.

Generally, within five business days of filing the NFTL, the IRS will send you a Notice of Your Right to a Collection Due Process Hearing. You’ll have until the date shown on the notice to request a Collection Due Process (CDP) hearing with the IRS Independent Office of Appeals (Appeals). This deadline can’t be extended for any reason. See Publication 1660, Collection Appeal Rights, for a full explanation of the CDP process. At the CDP hearing, you may raise many issues which include proposing another way to pay your debt, and in some cases, to contest the debt itself.

Once a lien arises, the IRS generally can’t release it until you’ve paid the tax, penalties, interest, and recording fees in full or until the IRS is no longer legally able to collect the tax. However, in certain circumstances you may request relief through NFTL withdrawal, lien discharge, lien subordination, or lien release.

This notice or letter may include additional topics that have not yet been covered here. Please check back frequently for updates.

What does this mean to me?

When the IRS files the NFTL in the public record, it puts your creditors on notice that the IRS has a claim against all of your current and future property and rights to property.

The lien attaches to all assets, personal or business, such as real estate, securities, vehicles, as well as future assets acquired in the period of the duration of the lien. For more information, refer to Publication 594, The IRS Collection Process.

If you file bankruptcy, your tax debt and lien may continue after the bankruptcy.

Generally, within five business days of filing the NFTL, the IRS will send you a Notice of Your Right to a Collection Due Process Hearing. You’ll have until the date shown on the notice to request a CDP hearing with Appeals. This due date can’t be extended for any reason. See Publication 1660 for a full explanation of the CDP process.

This notice also explains the possible denial or revocation of your United States passport. Visit Revocation or Denial of Passport in Case of Certain Unpaid Taxes for further information.

How did I get here?

You have a balance on your tax account which you have not paid, and the IRS has filed a public document, the Notice of Federal Tax Lien, with the local and/or state authorities to alert creditors that the government has a right to your interests in any current and future property and assets

What are my next steps?

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Verify the return address and review the notice

The first thing to do is to check the return address to be sure it’s from the Internal Revenue Service and not another agency.

If it’s from the IRS, the notice will have instructions on how to respond and provide a specific website link for you to visit for additional information located at the end of the notice or letter. Visit I Got a Notice From the IRS for further details including what to do if the notice is not from the IRS.


Also, if the IRS has already issued a CDP notice for that particular tax debt, then you can still request a hearing with Appeals either before or after the IRS files an NFTL. You will need to request a conference through the Collection Appeals Program (CAP), but unlike a CDP hearing, you may not seek review of Appeal’s determination in the U.S. Tax Court. See Publication 1660 for a full explanation of the CAP.

You can also ask that the IRS manager review your case informally. You can obtain the manager’s name and phone number by contacting the employee listed on your notice. IRS employees are required to give you their manager’s name and phone number.

Once a lien arises, the IRS generally can’t release it until you’ve paid the tax, penalties, interest, and recording fees in full or until the IRS is no longer legally able to collect the tax. However, in certain circumstances a lien may be withdrawn, discharged, or subordinated. Visit Liens for further information.

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It's important you don't ignore notices from the IRS.

Even if you can’t pay the taxes you owe, responding to a notice before the due date could prevent a lot of trouble. Be sure to keep your address up to date with the IRS so you receive all notices and letters.

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Options if you can’t pay the full amount you owe.

If you can’t pay the full amount you owe, you have payment options to help you settle your debt over time.

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If you disagree with the IRS that you owe the debt

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Other situations with liens that might apply to you

  • A “withdrawal” removes the public NFTL and assures that the IRS is not competing with other creditors for your property; however, you are still liable for the amount due.
    • See Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (Internal Revenue Code Section 6323(j).
  • A “discharge” removes the lien from specific property. For example, if you want to sell a certain piece of property that’s under a lien and intend to use part or all proceeds to pay your tax debt, you can apply for a Certificate of Discharge just on that property.
    • See Publication 783, Instructions on how to apply for a Certificate of Discharge From Federal Tax Lien.
  • A “subordination” doesn’t remove the lien but allows other creditors to move ahead of the IRS, which may make it easier to obtain a loan or refinance a mortgage.
    • See Publication 784, Instructions on how to apply for a Certificate of Subordination of Federal Tax Lien.
  • The IRS will “release” the lien once you have paid the debt in full — either in a lump sum or over time.
    • See , Release of Federal Tax Lien and Publication 487, How to Prepare Application to Release Property Secured by Federal Tax Lien.

Note: The IRS has several videos that relate to each topic that may be helpful to view in addition to the information shared here.

Where can I get additional help?

Understanding your notice or letter

Get Help topics

If you still need help

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn’t working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.

Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.

Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.

Additional Contact Information

  • Centralized Lien Operation: To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call 800-913-6050 or fax 855-753-8177.
  • Collection Advisory Group: For all complex lien issues, including discharge, subordination, subrogation or withdrawal; find contact information for your local advisory office in Publication 4235, Collection Advisory Group Addresses.
  • Under certain circumstances you may be able to appeal the filing of a Notice of Federal Tax Lien. For more information, see Publication 1660.
  • Centralized Insolvency Operation: If you are questioning whether your bankruptcy has changed your tax debt, call 800-973-0424.
  • Contact the IRS:

Related Notices and Letters

  • Lien Relief
    • NFTL Filed (in Public Records)
      • Form 668 (Y)(C), Notice of Federal Tax Lien
    • Notice of Lien Filed and Right to Collection Due Process Hearing
      • Letter 3172, Notice of Federal Tax Lien Filing and Your Rights to a Hearing Under IRC 6320
      • Letter 3171, Notice of Federal Tax Lien Additional Filing (We filed an additional Notice of Federal Tax Lien against you)
      • Letter 3886, Special Condition Notice of Federal Tax Lien Filing – Taxpayer
      • Letter 3177, Special Condition Notice of Federal Tax Lien Filing – Third Party
  • Lien Withdrawal
    • Letter 3044, Withdrawal after Notice of Lien Release
    • Letter 4026, Notice of Lien Withdrawal
    • Letter 4711, Withdrawal Decision
    • Form 12277, Application for Withdrawal of Filed Form 668(Y) Notice of Federal Tax Lien (as based on Internal Revenue Code Section 6323(j))
  • Lien Discharge
    • Letter 402, Conditional Commitment to Discharge Certain Property from Federal Tax Lien (Valueless)
    • Letter 403, Conditional Commitment to Discharge Certain Property from Federal Tax Lien (Value)
    • Letter 4025, Letter Advising of Action on Application for Discharge of Property from Federal Tax Lien
    • Form 14135, Application for Certificate of Discharge of Property from Federal Tax Lien
    • Publication 783, Instructions on how to apply for a Certificate of Discharge from Federal Tax Lien
  • Lien Subordination
    • Letter 4027, Advising of Action on Application for Subordination of Federal Tax Lien
    • Letter 4053, Conditional Commitment to Subordinate Federal Tax Lien
    • Form 14134, Application for Certificate of Subordination of Federal Tax Lien
    • Publication 784, Instructions on how to apply for a Certificate of Subordination of Federal Tax Lien
      • Publication 785, Purchase Money Mortgages, Purchase Money Security Interests, and Subordination of the Federal Tax Lien

 

  • Lien Release
    • Letter 3640, Taxpayer Lien Payoff
    • Notice 48, Release of Federal Tax Lien
      • Publication 487, How to Prepare Application to Requesting the United States to Release Its Right to Redeem Property Secured by Federal Tax Lien