A federal tax lien is a legal claim against your property after the Internal Revenue Service assesses the tax, sends you a bill and multiple notices, and you don’t pay. The IRS may also file a public Notice of Federal Tax Lien (NFTL) to alert creditors.
Paying in full is the quickest and cleanest fix: the IRS says it releases your lien within 30 days after you have paid your tax debt. If you can’t pay in full, you may be able to withdraw the public notice (Form 12277) or use discharge/subordination for a sale or refinance.
In 2026, IRS Simple Payment Plans don’t require a collection information statement or a lien determination step for qualified taxpayers, but an NFTL may still be filed in certain cases.
Already have a lien or trying to avoid one? Wiztax helps you choose the fastest realistic path based on what you can afford per month.
Key takeaways
- A federal tax lien exists after assessment + Notice of Federal Tax Lien + nonpayment. Note that an NFTL is a public filing.
- The IRS says it releases a lien within 30 days after your tax debt is fully paid.
- Withdrawal removes the public NFTL (you may still owe) and uses Form 12277.
- A direct debit installment agreement (DDIA) may qualify for NFTL withdrawal if you meet IRS criteria like $25,000 or less, pay in full in 60 months, and 3 direct-debit payments.
- Discharge (Form 14135) removes the lien from specific property. Subordination (Form 14134) can help a refinance or sale.
- If you can’t pay in full, act early to reduce collection escalation risk.
Start here: Lien vs NFTL vs Levy
What a lien is
A federal tax lien is the IRS’s legal claim against your property when you neglect or fail to pay a tax debt. Once it exists, the IRS says it attaches to all your assets and to future assets acquired during the lien’s duration.
What the Notice of Federal Tax Lien (NFTL) is
The IRS says it files a public document (the Notice of Federal Tax Lien) to alert creditors that the government has a legal right to your property.
Lien vs levy
The IRS summarizes it cleanly: a lien secures the government’s interest, while a levy is an actual seizure of property to satisfy the debt.
For more info on lien vs levy, see: IRS Letter 3172 Notice of Federal Tax Lien (NFTL) Filed and IRS Tax Lien vs Tax Levy.
When liens are filed (and what the IRS looks at)
The legal trigger (what has to happen first)
The IRS explains that a federal tax lien exists after it (1) assesses your tax liability, (2) sends you a bill, and you (3) neglect or refuse to fully pay the debt in time. That also explains a common surprise: the lien can exist even before the IRS files a public NFTL.
The IRS “lien determination” process (why it’s not always automatic)
A lien “existing” and an NFTL being filed are not the same thing. The IRS describes the NFTL as the public notice it files to alert creditors.
For some installment agreement categories, IRS procedures say an NFTL determination is “not required,” but the IRS allows filing in certain circumstances to protect the government’s interest (for example, if a property sale is imminent).
What this means in real life
High-level takeaway: don’t assume “payment plan = no NFTL.” Even with easier 2026 options, the IRS can still file an NFTL in some scenarios and once filed it can affect credit and property transactions.
How payment plans interact with liens in 2026
Simple Payment Plans (≤$50k): what’s new and what it does not guarantee
The IRS describes Simple Payment Plans as long-term payment plans for qualified taxpayers and says they don’t require a Collection Information Statement or a lien determination as of Feb. 18, 2026. The IRS also states that more than 90% of individual taxpayers will qualify.
If your goal is to avoid an NFTL, getting into the simplest payment plan quickly can reduce friction and delays that otherwise lead to liens.
Streamlined/long-term plans: where lien determination may still show up
If you don’t qualify for simple/guaranteed tax relief options, the IRS warns that a Notice of Federal Tax Lien determination and a Collection Information Statement may be required.
And if you can’t afford to pay your full tax debt by the Collection Statute Expiration Date, the IRS says a partial payment installment agreement (PPIA) may require financial disclosures and that it will also need to determine whether to issue a public NFTL.
The “best practice” if you’re trying to avoid an NFTL
The IRS’s own recommendation on avoiding liens is straightforward: file and pay on time when possible, and if you can’t, don’t ignore IRS letters and use payment options early.
A practical sequence is: get filing-compliant → pick a realistic monthly amount → get into a payment plan (installment agreement or Offer in Compromise) → pay consistently to avoid default.
Two checklists (choose your path)
Checklist A: You already have an NFTL filed
- Confirm the filing (Letter/notice such as Letter 3172, county recorder records, or a title report).
- Identify the tax periods and current payoff amount (don’t guess, get an official payoff).
- Pick the right tool: release vs withdrawal vs discharge vs subordination.
- Start the fastest viable fix ASAP (timing matters, especially when you’re selling or refinancing).
Checklist B: You’re trying to avoid a lien/NFTL
- File and pay on time when you can; if you can’t, don’t ignore IRS notices.
- Use payment options early if you can’t pay in full.
- Setup your IRS payment plan before applying for loans/refinance/sale, because an NFTL can complicate transactions.
How to remove or reduce the impact of an IRS tax lien in 2026
“Remove” (option 1): Lien release (the cleanest removal)
Practically, you’re looking for the IRS’s Certificate of Release of Federal Tax Lien, and you want it recorded where the NFTL was filed (important for title/closing). IRS Publication 1450 explains that the IRS will issue a Certificate of Release for filing in the same recording office where the NFTL was filed, and it describes how to request a payoff amount and how to check the certificate’s status through the IRS Centralized Lien Operation.
“Remove” (option 2): Withdrawal (removes the public notice, not necessarily the debt)
Release vs withdrawal (in simple terms): The IRS says withdrawal removes the public NFTL and you may still be liable for the amount due.
The IRS also lists situations when it may withdraw an NFTL (procedure issue, installment agreement entered, speeds up payment, or it’s in the best interest of both parties).
DDIA withdrawal path: $25k or less + full pay in 60 months + 3 direct-debit payments. (Plus, compliance and no prior DDIA defaults.)
To request withdrawal, the IRS points taxpayers to Form 12277 (Application for the Withdrawal of Filed Form 668(Y)).
For our step-by-step completion and mailing tips, see IRS Form 12277: Tax Lien Withdrawal.
“Remove” (option 3): Discharge (remove lien from a specific property)
The IRS says a discharge removes the lien from specific property, and it points to Publication 783, Instructions on How to Apply for Certificate of Discharge From Federal Tax Lien.
Publication 783 instructs taxpayers to complete Form 14135, Application for Certificate of Discharge of Property from Federal Tax Lien and generally submit the application at least 45 days before the transaction date.
Take a look at our form-specific guide to avoid duplicating instructions: IRS Form 14135: Federal Tax Lien Discharge.
“Avoid/solve a transaction” (option 4): Subordination (refinance/sale workaround)
The IRS explains that subordination does not remove the lien; it allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage.
Publication 784, Instructions on How to Apply for a Certificate of Subordination of Federal Tax Lien says to apply using Form 14134 and advises submitting the application at least 45 days before the transaction date.
For more on lien subordination from Wiztax, see: Understanding IRS Tax Lien Subordination.
How to avoid a tax lien in 2026 (prevention playbook)
The simplest “avoid lien” rule
The IRS says you can avoid a federal tax lien by filing and paying your taxes in full and on time, and it explicitly advises taxpayers not to ignore IRS letters when they can’t pay.
Best “avoid NFTL” moves when you can’t pay
If you qualify, entering a Simple Payment Plan early is often the lowest-friction way to show good-faith intent to pay (and it avoids the financial statement step).
If you don’t qualify for the simple/guaranteed relief options, the IRS says you may face both a Collection Information Statement requirement and an NFTL determination. So, acting earlier still matters.
Common mistakes that make liens worse
Mistake one is assuming “payment plan = no lien.” The IRS says NFTL determinations can still apply in some payment plan scenarios, and NFTL filings may still occur to protect the government’s interest.
Mistake two is waiting until you’re already refinancing or selling; Publication 783/784 both urge submitting certificate applications at least 45 days before the transaction date.
Mistake three is choosing the wrong lien removal option: withdrawal targets the public NFTL, while discharge/subordination are typically the transaction tools.
How Wiztax helps
Wiztax helps you pick the right tax relief option fast to remove, withdraw, or avoid a lien
Wiztax turns your inputs (balance, budget, assets, and urgency like sale/refi) into a plan: release vs withdrawal vs discharge/subordination. We’ll help you compile your financial documents, determine your best payment plan option to stop the lien (installment agreement, Offer in Compromise, etc.), and submit your tax relief request to the IRS.
Start Free with Wiztax: see your best lien relief option in minutes.
FAQs
How long does an IRS tax lien last?
A federal tax lien generally remains until the liability is paid in full or becomes legally unenforceable.
The IRS says it generally can’t release the lien until the tax, penalties, interest, and recording fees are paid in full (or until it may no longer legally collect). The collection statute is generally 10 years from the assessment date.
What’s the difference between lien release and lien withdrawal?
A release removes the lien because release conditions are met (for example, the debt is paid in full).
A withdrawal removes the public Notice of Federal Tax Lien, and you may still be liable for the amount due.
Will the IRS release the lien after I pay? How fast?
Yes, the IRS says it releases your lien within 30 days after you have paid your tax debt.
IRS Publication 1450 says the IRS issues a Certificate of Release for filing in the same recording office where the NFTL was filed.
Publication 1450 explains how to check the certificate’s status through the Centralized Lien Operation.
Can I withdraw a tax lien while I still owe?
Sometimes. IRS Topic 201 lists withdrawal situations that can apply even when you still owe, including if withdrawal will allow you to pay more quickly.
The IRS also lists a DDIA-based “Fresh Start” withdrawal option with general criteria such as $25,000 or less and three consecutive direct-debit payments.
Withdrawal requests use Form 12277.
Does a Simple Payment Plan prevent a Notice of Federal Tax Lien?
It’s not a guarantee. The IRS says Simple Payment Plans don’t require a lien determination step for qualified taxpayers. But an NFTL may still be filed in some circumstances to protect the government’s interest.
And if you don’t qualify for simple tax relief, IRS Topic 202 says an NFTL determination may be required.
Can I sell my house with an IRS tax lien?
A lien can complicate a sale because it attaches to property and an NFTL is recorded publicly.
If you can’t fully pay the tax you owe but need to sell, the IRS says a discharge removes the lien from the specific property being transferred.
Publication 783 explains the process and points to Form 14135 for the application.
What’s subordination and when does it help?
The IRS says subordination doesn’t remove the lien. It allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage.
Publication 784 says to submit the application at least 45 days before the transaction date.
Apply with Form 14134.
How do I request the payoff amount for my lien?
IRS Publication 1450 explains how to request a payoff amount through your online account, the office assigned to your account, or the IRS Centralized Lien Operation.
Publication 1450 lists Centralized Lien Operation phone/fax contacts for payoff and certificate status questions.
If you haven’t received the Certificate of Release after 30 days from satisfying the liability, Pub 1450 explains how to check its status.
Can I appeal the filing of an NFTL?
The IRS says you can appeal the filing of an NFTL, with rights explained in Publication 1660.
On Letter 3172, the IRS says you can request an appeal within 30 days from the letter date.
The IRS also points to Form 12153 for the Collection Due Process hearing request tied to that 30-day window.
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