IRS Lien Filed Against You? What It Means and What to Do Next
A Federal Tax Lien Is the IRS Putting a Legal Claim on Everything You Own
If you’ve received a notice that the IRS has filed a Notice of Federal Tax Lien, it means they are now publicly asserting a legal claim against your personal or business property due to unpaid tax debt.
This is not just a letter. A lien can damage your credit, block you from refinancing property, and follow you until the tax is paid or settled.
In this blog, we break down what it means, how to respond, and how to resolve or remove the lien with the least financial damage.
What Is a Federal Tax Lien?
A tax lien is a legal claim against your:
- Real estate
- Vehicles
- Personal property
- Financial accounts
- Future income or assets
It gives the IRS priority over other creditors once filed and appears in public records.
Related: IRS Wage Garnishment: What It Is and How to Stop It
How Do You Know a Lien Has Been Filed?
You’ll usually receive IRS Notice 3172, formally titled:
Notice of Federal Tax Lien and Your Right to a Hearing Under IRC 6320
Once filed, the lien is recorded with your county clerk or state recorder and will appear:
- On background checks
- On credit reports (via third-party databases)
- In public record databases searched by lenders and employers
What Triggers an IRS Lien?
The IRS can file a lien when:
- You owe more than $10,000
- You’ve received prior notices (CP14, CP504, etc.)
- You haven’t entered into a resolution like an Installment Agreement
Even if you’re communicating with the IRS, they may still file a lien if no agreement is in place.
What Are the Consequences of a Tax Lien?
- Blocks refinancing or selling property
- Lowers your borrowing ability
- Impacts business relationships and licenses
- Signals to the IRS that forced collection may follow
If you also receive a Notice of Intent to Levy, you’re entering the enforcement phase.
Step 1: Don’t Ignore the Lien
A filed lien won’t go away on its own. If you ignore it:
- Interest and penalties continue to grow
- The IRS may issue levies or wage garnishments
- You lose the chance to negotiate from a strong position
Related: Facing Back Taxes? Here’s How Orange County Residents Can Get Relief
Step 2: Explore IRS Lien Removal or Withdrawal Options
1. Pay the Balance in Full
This removes the lien after payment is processed—but it can take 30–60 days.
2. Submit a Request for Lien Withdrawal (Form 12277)
If the lien was filed in error or you meet special conditions (e.g., entered into Direct Debit Installment Agreement under $25K), you can request early removal.
3. Request Subordination
This allows another creditor (like a mortgage lender) to move ahead of the IRS—helpful if you’re trying to refinance.
4. Apply for an Offer in Compromise
A lien will stay in place during review but can be released once the offer is accepted and paid.
Related: IRS Offer in Compromise – How to Settle for Less Than You Owe
Step 3: Consider Appealing the Lien
You have the right to request a Collection Due Process (CDP) Hearing within 30 days of receiving the lien notice.
This gives you:
- A pause on collection
- A chance to propose alternatives
- Access to appeal the IRS decision
Related: IRS Collection Appeals Program (CAP) vs. CDP Hearings – What’s the Difference?
We Help Orange County Taxpayers Remove or Resolve IRS Liens
At Boulanger CPA and Consulting PC, we help individuals and business owners:
- Respond to lien notices
- Request lien withdrawals or subordination
- Settle the underlying tax debt
- Avoid future liens through strategic planning
Call (657) 218-5700 or schedule your consultation at www.orangecounty.cpa
FAQ: IRS Tax Liens
Q: How long does an IRS lien stay on my record?
A: Until the tax is paid in full or settled, and you request withdrawal. The public record can persist for months afterward unless removed.
Q: Can a lien prevent me from buying or selling property?
A: Yes. It will block title transfers or refinances until addressed.
Q: Will entering a payment plan stop the lien?
A: Not always—but
Direct Debit Installment Agreements under $25,000 may qualify for lien withdrawal.
Q: What if the lien was filed by mistake?
A: You can submit Form 12277 to request a formal withdrawal and document the error.
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
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