How to Remove an IRS Tax Lien: 4 Proven Strategies to Regain Control of Your Finances

How to Remove an IRS Tax Lien: Clear Your Path to Financial Freedom

Owing taxes can feel overwhelming, but an IRS tax lien doesn’t have to be a life sentence. If you’ve been hit with a tax lien, don’t panic — there are clear, actionable steps you can take to remove it.

In this guide, we’ll walk you through everything you need to know about IRS tax liens, including:

• What an IRS tax lien is

• How it affects your finances

• How to remove it

  
  

By the end, you’ll have the tools and confidence to move forward. And if you need help along the way, our team of experienced tax professionals is just a call away.

What Is an IRS Tax Lien?

An IRS tax lien is a legal claim the government places on your property when you owe unpaid taxes. This lien gives the IRS the right to your assets — such as your home, car, or bank accounts — if you fail to pay.

Important distinction: A lien is different from a levy. While a lien is a claim against your property, a levy allows the IRS to actually seize your assets.

What property can an IRS tax lien affect?

• Homes and real estate

• Vehicles (cars, trucks, boats, etc.)

• Bank accounts and financial accounts

• Business property and equipment

  
  

Once the lien is in place, it becomes public record, meaning creditors and financial institutions can see it. This makes it difficult to obtain new loans, refinance, or access credit.

When Does the IRS File a Tax Lien?

The IRS doesn’t file a lien without giving you plenty of warning. Here’s how the process works:

1. Notice of Deficiency (90-Day Letter): The IRS notifies you of your tax debt and gives you 90 days to pay.

2. Notice of Federal Tax Lien: If you don’t pay or contact the IRS to set up a payment plan, the IRS files a formal lien to claim your property.

3. Public Record Filing: The lien is recorded, alerting other creditors that the IRS has first dibs on your property.

   
   

When does a lien apply?Tax liens are typically issued for debts of $10,000 or more, but smaller debts may still result in a lien if the IRS believes you’re trying to avoid payment (for example, if you’re liquidating assets or filing for bankruptcy).

How Long Does an IRS Tax Lien Last?

Here’s some good news: IRS tax liens don’t last forever. The IRS has a limited amount of time to collect your tax debt, known as the Collection Statute Expiration Date (CSED).

How long is the IRS collection period?Typically, the IRS has 10 years to collect unpaid taxes, starting from the date your tax bill is first issued. After this period, the lien is automatically removed.

When can the CSED be extended?In some cases, the IRS can "pause the clock" on the collection period, extending the 10-year deadline. This can happen if you:

• File for bankruptcy (the clock stops during bankruptcy proceedings)

• Request Innocent Spouse Relief

• File an Offer in Compromise (the process pauses the collection period)

• Leave the U.S. for 6+ months

• Request a Collection Due Process (CDP) hearing

  
  

If you believe your CSED has already expired, you may be able to have the lien removed immediately. This is a complex process, so it’s smart to work with a tax professional.

How Do You Remove an IRS Tax Lien?

Here’s the good news: IRS tax liens can be removed.

The most direct path is to pay the debt in full, but that’s not the only option. Let’s explore the most effective ways to remove an IRS tax lien.

1. Pay Your Tax Debt in Full

The most straightforward way to remove an IRS tax lien is to pay your balance in full. Once you do, the IRS will release the lien within 30 days of receiving payment.

How to do it:

• Pay online via the IRS website.

• Contact the IRS to confirm your payment has been received.

• Request a Lien Release Certificate from the IRS if you need proof that the lien has been removed.

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Pro Tip: If paying in full isn’t realistic for you, don’t worry — there are other options.

2. Request a Withdrawal of the Lien

If you believe the lien was filed in error or that you were unfairly targeted, you can request a lien withdrawal. This effectively erases the lien as if it never existed.

When can you request a withdrawal?

• If the IRS filed the lien by mistake (for example, they targeted the wrong taxpayer).

• If you’ve set up a Direct Debit Installment Agreement and have been making payments consistently.

  
  

How to request a lien withdrawal:

• Submit IRS Form 12277 (Application for Withdrawal of Filed Form 668).

• Provide supporting documentation that shows why the lien was incorrect or that you’ve met the terms of your payment agreement.

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3. Request a Lien Release

Once your debt is paid in full, the IRS will automatically issue a lien release. This releases the lien from public records, restoring your ability to borrow money or refinance your property.

How long does it take?The IRS must release the lien within 30 days of receiving your payment.

4. Request Lien Subordination

If you need to refinance your home but the lien is standing in your way, you can request a Certificate of Subordination from the IRS. This allows other creditors (like your mortgage lender) to "jump ahead" of the IRS on your property claim.

Why request lien subordination?

• It allows you to refinance your home or property.

• It frees up funds to help you pay off your IRS debt.

  
  

Keep in mind: Subordination does not remove the lien, but it makes it easier to access credit or refinance your home.

How Do IRS Tax Liens Affect You?

While an IRS tax lien may not directly lower your credit score, it can affect your ability to borrow money. This is because the lien becomes public record, and lenders can see it.

Here’s how a lien can affect you:

• Loan Denials: Lenders may reject your mortgage or loan applications.

• Harder to Refinance: Refinancing your home can be challenging when the IRS has a claim on it.

• Limited Access to Credit: If lenders see an IRS lien on your record, they may view you as a high-risk borrower.

  
  

The takeaway? Address the lien as quickly as possible to protect your financial future.

Don’t Let a Tax Lien Hold You Back — Take Action Today!

An IRS tax lien doesn’t have to control your financial future. With the right strategy, you can remove it, restore your credit, and regain peace of mind.

Here’s a quick recap of your options:

• Pay your debt in full (fastest option)

• Request a lien release after payment is made

• Request a lien withdrawal if there’s an error

• Ask for lien subordination to refinance your property

  
  

Need help? Our experienced tax professionals are ready to guide you through every step. We’ll help you negotiate with the IRS, understand your options, and work toward removing the lien as quickly as possible.

Contact us today for a free consultation! www.getreliabletaxrelief.com