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Published: October 28, 2020   |   Last Updated: November 4, 2022

Withdrawal of Notice of Federal Tax Lien

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 and the statutory lien remains valid for the amount of assessment.

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Station Overview

Withdrawal of the Notice of Federal Tax Lien (NFTL) is filed as public record.  Both the original NFTL and the Withdrawal will show on public record, but the withdrawal acts as removal of the original NFTL.

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?

The IRS may consider granting a withdrawal of the NFTL in the following situations:

  • The NFTL filing was premature or not in accordance with IRS procedures
  • You entered into a (installment agreement) and the plan did not provide for the NFTL to be filed
  • You entered into a Direct Debit Installment Agreement and have met certain conditions (see below)
  • You have full paid your balance and the NFTL has been released you have met certain conditions (see below)
  • Withdrawal of the NFTL will facilitate collection of the tax
  • You, or the Taxpayer Advocate acting on your behalf, believes withdrawal is in your best interest and the best interest of the government

You will still be responsible for the balance owing on your account, if applicable, after the lien withdrawal.

How did I get here?

You have an unpaid tax balance and an NFTL has been recorded as public record, putting other creditors on notice that you owe the IRS.  You would like the IRS to consider withdrawing the NFTL so that it appears that it was never filed.

What are my next steps?

If you are currently set up on a Direct Debit Installment Agreement, the IRS may consider withdrawal of the NFTL if the following criteria are met:

  • You are a qualifying taxpayer (i.e., individuals, businesses with income tax liability only, and out of business entities with any type of tax debt)
  • You owe $25,000 or less (If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting withdrawal of the Notice of Federal Tax Lien)
  • Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the timeframe for IRS to collect expires, whichever is earlier
  • You are in full compliance with other filing and payment requirements
  • You have made three consecutive direct debit payments
  • You have not defaulted on your current, or any previous, Direct Debit Installment Agreement.

IRS may allow withdrawal of your Notice of Federal Tax Lien after the lien’s release. General eligibility includes:

  • Your tax liability has been satisfied and your lien has been released and:
  • You are in compliance for the past three years in filing – all individual returns, business returns, and information returns
  • You are current on your estimated tax payments and federal tax deposits, as applicable

To request IRS consider your request for withdraw of the NFTL, complete Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (Internal Revenue Code Section 6323(j).

If a determination is made to withdraw the NFTL, the IRS will file a Form 10916(c), Withdrawal of Filed Notice of Federal Tax Lien, in the recording office where the original NFTL was filed and provide you a copy of the document for your records.

If the request for withdrawal is denied, you will receive Letter 4711, Withdrawal Decision Letter.  The letter will include you appeal rights under the Collection Appeals Program (CAP).

See Lien Relief additional options to address the NFTL.

 

 

 

Where can I get additional help?

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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

  • Form 668 (Y)(C), Notice of Federal Tax Lien
  • 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))
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Where am I in the tax system?

Withdrawal of Notice of Federal Tax Lien (NFTL)

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