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There is a difference between a lien release and a lien withdrawal. A lien is released when the tax debt has been satisfied. A lien withdrawal removes the effects of a publicly recorded Notice of Federal Tax Lien (NFTL) when taxes are still owed.
The IRS has filed a NFTL for unpaid tax balances.
Paying the tax balance in full can stop other collection actions.
The NFTL is a public record that can affect you and your property and assets.
When you don’t pay your taxes, the IRS can file a public document with the local and/or state authorities.
When the NFTL is filed, it alerts creditors you owe the government.
The NFTL secures the priority of the government’s claim to your current and future property and assets until the balance is paid in full.
While NFTLs no longer appear on credit reports, they may still affect your ability to get credit if a potential creditor uses other resources, such as public records, to discover the NFTL.
When a NFTL is filed because you owe taxes, the IRS can withdraw it from public record under certain conditions.
Conditions the NFTL can be withdrawn are:
To apply for a lien withdrawal after the tax is full paid and the lien was released, then you must make the request in writing and have submitted all your required tax returns including current estimated tax payments, if applicable.
To apply for withdrawal of the NFTL, submit Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (Internal Revenue Code Section 6323(j).
The IRS will notify you by letter if your application was accepted or denied.
If your application is denied, you can request a conference with the IRS Independent Office of Appeals using a Form 9423, Collection Appeal Request. See Publication 1660, Collection Appeal Rights, for full explanation of the Collection Appeal Program.
There are other types of lien relief the IRS offers. See Lien Relief for more options.
Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (Internal Revenue Code Section 6323(j)
Guidelines for Notices of Federal Tax Liens and Centralized Lien Processing
Understanding your notice or letter
For more specifics on your notice, visit Understanding your IRS Notice or Letter on IRS.gov
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