A FEDERAL TAX LIEN EXISTS AFTER THE IRS:
- Assesses your liability;
- Sends you a bill that explains how much you owe (Notice and Demand for Payment); and
- You neglect or refuse to fully pay the debt in time.
The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property.
HOW TO GET RID OF YOUR FEDERAL TAX LIEN
- Discharge of property from the Federal Tax Lien.
- This allows property to be sold free of the lien. The seller or buyer can submit Publication 783, Instructions on How to Apply for Certificate of Discharge From Federal Tax Lien (PDF).
- Subordination of the Federal Tax Lien.
- Does not remove the lien, but allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage. For more information review Publication 784, Instructions on How to Apply for a Certificate of Subordination of Federal Tax Lien (PDF).
- Withdrawal of the Federal Tax Lien.
- Removes the public notice and assures that the IRS is not competing with other creditors for your property. If applying for a withdrawal, use Form 12277, Application for the Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (PDF).
DIFFERENT WAYS THE FEDERAL TAX LIEN AFFECTS YOU
- Assets — A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.
- Credit — Once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.
- Business — The lien attaches to all business property and to all rights to business property, including accounts receivable.
- Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.
THE DIFFERENCE BETWEEN A FEDERAL TAX LIEN VS A FEDERAL TAX LEVY
A lien is not a levy. A lien secures the government’s interest in your property when you don’t pay your tax debt.
A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.
IMPORTANT FEDERAL TAX LIEN CONTACT INFORMATION
Centralized Lien Processing.- To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call (800) 913-6050.
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 (PDF).
Office of Appeals.- Under certain circumstances, you may be able to appeal the filing of a Notice of Federal Tax Lien. For more information, see Publication 1660, Collection Appeal Rights (PDF).
- Taxpayer Advocate Service.- For assistance and guidance from an independent organization within IRS, call (877) 777-4778.
Centralized Insolvency Operation.- If you are questioning whether your bankruptcy has changed your tax debt, call (800) 973-0424.