IRS Tax Lien Help: Release or Resolve a Federal Tax Lien
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Has the IRS Filed a Federal Tax Lien Against You?
A federal tax lien can affect your property, finances and ability to sell or refinance certain assets.
If the IRS has filed a Notice of Federal Tax Lien (NFTL) because of unpaid federal taxes, addressing the underlying tax debt is an important step toward resolving the lien.
Tax Help Hawaii helps individuals and businesses understand IRS tax liens, evaluate available tax resolution options, and work toward resolving the tax problem that caused the lien.
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Call Tax Help Hawaii: 310-966-0266
What Is an IRS Tax Lien?
A federal tax lien is the government’s legal claim against a taxpayer’s property when federal tax debt remains unpaid after the IRS follows applicable assessment and notice procedures.
The lien can attach to property you own, including certain:
- Real estate
- Personal property
- Financial assets
- Business property
- Rights to property
A federal tax lien is different from an IRS levy.
A lien is a legal claim against property. A levy is an actual seizure of property or funds.
Understanding that difference is important when deciding how to address an IRS collection problem.
What Is a Notice of Federal Tax Lien?
A Notice of Federal Tax Lien, commonly called an NFTL, is a public notice filed by the IRS to alert creditors that the federal government has a legal claim against a taxpayer’s property.
The filing can affect financial transactions involving property and may complicate situations such as selling or refinancing real estate.
If you’ve received notice that an NFTL has been filed, don’t ignore it.
Tax Help Hawaii can review your tax situation and explain the options that may be available.
IRS Tax Lien Release vs. Withdrawal
Yes. Under applicable IRS rules, a federal tax lien can be released when certain requirements are satisfied.
For example, the IRS generally releases a federal tax lien after the tax liability has been fully satisfied or becomes legally unenforceable, subject to applicable requirements.
However, release, withdrawal, discharge and subordination are different IRS procedures. The right option depends on what you’re trying to accomplish and your individual tax situation.
These terms are often confused.
Tax Lien Release
A release generally occurs when the underlying federal tax liability has been satisfied or the lien is otherwise no longer enforceable under applicable law.
Notice of Federal Tax Lien Withdrawal
A withdrawal removes the public Notice of Federal Tax Lien under qualifying circumstances.
Withdrawal does not necessarily mean that the underlying tax debt has disappeared.
Tax Help Hawaii can help determine which procedure may apply to your situation.
Tax Lien Discharge & Subordination
There are situations where resolving a tax lien doesn’t necessarily mean immediately eliminating the entire tax debt.
Discharge of Property
A certificate of discharge may remove the federal tax lien from a specific piece of property when applicable IRS requirements are met.
This can sometimes be important when a taxpayer is trying to sell property affected by a federal tax lien.
Subordination
Lien subordination does not remove the federal tax lien.
Instead, the IRS may agree under qualifying circumstances to allow another creditor’s interest to move ahead of the federal tax lien.
This can sometimes help facilitate a refinance or another financial transaction.
Eligibility for either option depends on IRS rules and the taxpayer's individual circumstances.
How Does an IRS Tax Lien Affect Real Estate?
- When competing interests were established
- How property ownership is structured
- Applicable federal and State law
- Other mortgages or liens against the property
- The amount of equity in the property
- Whether the property is being sold or refinanced
Federal lien priority can be complicated.
If an IRS tax lien is affecting a real estate transaction, Tax Help Hawaii can review the tax issue and determine what IRS resolution procedures may be available.
Frequently Asked Questions
Does an IRS Tax Lien Affect Your Credit Report?
Federal tax liens are public records, but the three major consumer credit bureaus—Equifax, Experian and TransUnion—no longer include tax liens on standard consumer credit reports.
However, that does not mean a federal tax lien is harmless.
An NFTL can still affect property transactions, creditor rights, financing decisions and other financial matters.
That’s why resolving the underlying IRS tax problem remains important.
IRS Tax Lien vs. IRS Levy
An IRS tax lien and IRS levy are not the same thing.
- IRS Tax Lien: The government’s legal claim against your property because of unpaid tax debt.
- IRS Bank Levy: Allows the IRS to seize funds from a bank account under applicable collection procedures.
- IRS Wage Levy: Can require an employer to continuously send part of a taxpayer’s wages to the IRS.
If you’re already facing a bank or wage levy, immediate action may be particularly important.
Can You Prevent an IRS Tax Lien?
In some circumstances, addressing an IRS tax debt before a Notice of Federal Tax Lien is filed may provide more options.
The appropriate approach depends on the amount owed, your filing compliance, ability to pay and other financial circumstances.
Potential resolution strategies may include:
Paying the tax liability
Establishing an IRS Installment Agreement
Applying for an Offer in Compromise when qualified
Seeking Currently Not Collectible / Hardship Status when applicable
Resolving unfiled tax returns
Addressing disputed tax liabilities
Other appropriate IRS tax resolution strategies
If you've received IRS collection notices but an NFTL has not yet been filed, acting early may be beneficial.
Resolve the Tax Debt Behind the Lien
Addressing the underlying tax liability is often the most important part of resolving an IRS tax lien.
Tax Help Hawaii will review your situation and determine which IRS tax resolution options may be appropriate based on your circumstances.
Our goal is not simply to address the lien paperwork.
We want to help you find a path toward resolving the tax problem that caused the lien in the first place.
Get IRS Tax Lien Help Today
If the IRS has filed a Notice of Federal Tax Lien against you or your property, don’t ignore it. Let Tax Help Hawaii review your situation and explain your potential options.
Call Tax Help Hawaii: 310-966-0266
Serving Maui, Hawaii and taxpayers nationwide with qualifying federal IRS tax matters.
IRS lien release, withdrawal, discharge, subordination and other tax resolution options depend on each taxpayer’s circumstances, eligibility and applicable IRS rules. Results are not guaranteed.