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 actions

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

If you also receive a responding to an IRS notice of intent to levy, you’re entering the enforcement phase where property and income are at risk.

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

Taxpayers may also explore challenging IRS penalties through abatement if they were assessed unfairly or due to reasonable cause.

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

This can be a powerful tool for settling debt with an Offer in Compromise, allowing you to potentially pay less than the full balance owed.

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

You don’t have to navigate this process alone—learn more in Defend What’s Yours.

📣 About the Author

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.

With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.

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.

Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.

📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.