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How to Release a Federal Tax Lien

by Ryan Yates

This is the second tax related post from the experts.  Penalties for Failure to Pay Federal Taxes was the first.  I hope the advice from the pros helps you out.  Thanks to the crew at for this guest post.

A tax lien is the right to take over the possession of something owned if the obligation to pay is not satisfied. It is law imposed upon property to secure the payment of taxes that are due. A tax lien may be imposed on outstanding taxes, real estate or personal property because the property holder has failed to pay taxes owed.  There is a process that has to happen before a release of lien is issued.

A federal lien is a lien that is placed upon all of a person’s property because of failure to pay annual taxes to the IRS.  The lien will remain in effect until all outstanding debt, penalties and interest is paid in full to the IRS.

A federal lien severely damages your credit history report and makes future borrowing next to impossible.  The unfortunate part of this is that most people have a difficult time getting out of debt. Federal debt due to nonpayment of taxes is a serious offense that offers longstanding consequences even after it is satisfied.

To get a federal tax lien released can be a cumbersome process. You will need to obtain the exact payoff amount that is owed to the IRS.  This amount is a matter of public record so it is information that is available to you and the rest of the public. You can obtain this by contacting the IRS by phone or sending a certified letter requesting your payoff amount.

The Process for Releasing a Tax Lien.

  • In order to get a release of federal tax lien you must pay off the debt that is outstanding, in full. Paying off your federal debt outright is the best way to get a lien released. Unfortunate for most individuals who find themselves in debt; paying off large sums of money is not possible.
  • You may choose to sell your properly that holds a lien to pay this off.  You can choose to apply for what is called a Certificate of Discharge which will allow the sale to go through and the money goes to satisfy the outstanding federal debt.
  • Once the debt is paid off and the lien is satisfied you have to file a Request for Release of Federal Tax Lien directly with the IRS.  The government will not automatically file or release you from the lien unless you file this paperwork.  It is essential that you file this upon payoff. Failure to file this release can result in the lien remaining on the books and listed as outstanding for up to ten years.
  • Once you satisfy your debt and file the proper paperwork for the Release of Federal Tax Lien, the release notice should take about 30 days to be issued.

Once all paperwork has been received indicating the release of lien process can be considered complete. Any discrepancies with the process or the paperwork should be addressed with the IRS. Information relating to the IRS or taxpayer issues can be resolved by calling the IRS at 1-800-913-6050.

This article is provided by, a site designed to help you pay back taxes.  Owing back taxes to the IRS is stressful, and negligence will only worsen the situation.    Learn how to file back taxes.

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James July 13, 2010 at

this is scary stuff and it seems that although it can be a very difficult situation to get out of the best thing to do is face it head on and ensure that you get it taken care of ASAP.

Arohan August 9, 2010 at

From my occasional experiences with IRS audit department, it helps to be absolutely truthful and if you made a mistake, just to admit it. Now-a-days, they are more predisposed to work with you to find a resolution.

Jeffrey Kosola August 11, 2010 at

@Arohan Thanks for the comment. That is a great point to keep in mind.

Ted June 20, 2011 at

The key is to make sure that you address your tax issues head on. Also, don’t file late. Late filing penalties are 5% a month capped at 25%.

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