What Is an IRS Tax Lien?
A federal tax lien is a legal claim against your property that arises when you neglect or fail to pay a tax debt. The lien protects the government's interest in all your property, including real estate, personal property, and financial assets.
- Attaches to all current and future property
- Filed publicly with your county recorder
- Appears on your credit report (prior to 2018)
- Affects ability to sell or refinance property
- Remains until debt is paid or statute expires
How a Tax Lien Affects You
A tax lien can significantly impact your financial life beyond just the tax debt itself.
- Credit score damage and lending difficulties
- Cannot sell property without IRS involvement
- Business credit and contracts affected
- Professional licenses may be impacted
- Public record visible to employers and landlords
Lien vs. Levy: Understanding the Difference
A lien is a claim against your property, while a levy is the actual seizure of property. A lien secures the government's interest; a levy takes your property to satisfy the debt. Liens typically precede levies in the collection process.
How to Get a Tax Lien Released
The IRS will release a lien within 30 days after you pay your tax debt in full or the IRS accepts a bond guaranteeing payment. You can also request lien release if the lien was filed in error or the Collection Statute Expiration Date (CSED) has passed.
Lien Withdrawal vs. Release
A lien release removes the lien after the debt is satisfied. A lien withdrawal removes the public Notice of Federal Tax Lien as if it was never filed, which can help repair credit faster. Withdrawal is available under specific circumstances including entering a Direct Debit Installment Agreement.