IRS tax liens: what they do and how to deal with them

Lien versus levy

A lien is a claim against your property that secures the tax debt. A levy is the actual seizure of money or property. A lien can exist without any levy, and it often shows up first, when a lender or title company finds it.

When the IRS files a public notice

A lien arises automatically after the IRS assesses a balance, sends a demand for payment, and you do not pay. The IRS may then file a Notice of Federal Tax Lien, which makes the claim public and puts other creditors on notice. That filing is what typically blocks a sale or refinance.

Your options

• Release. The IRS releases the lien after the debt is paid in full, generally within about 30 days.
• Withdrawal. In some cases the IRS will remove the public notice, for example when you meet its guidelines on a direct-debit payment plan. The underlying debt remains.
• Discharge. Frees specific property from the lien so you can sell it, typically with proceeds going to the IRS.
• Subordination. Lets another lender take priority, which can allow a refinance.

How we help

We find out which option is realistic for you, prepare the IRS applications, and coordinate with the title company or lender when a closing is involved. We also work on the underlying balance so the lien does not come back.

Related

• Offer in compromise
• IRS payment plans
• Unfiled tax returns
• Levies and wage garnishments
• Penalty relief
• Audit and appeals
• Payroll tax problems