The IRS Doesn’t Forget: How Tax Liens Work and What You Can Do About Them

You may not know it yet, but if the IRS has filed a lien against you, it’s public record.

That means lenders, creditors, and sometimes even potential business partners can see it. And while a tax lien doesn’t mean the IRS is taking your property right away, it does mean they have a legal claim to it until your debt is resolved.

Here’s what you need to know about IRS tax liens — and how to get out from under them.

What Is an IRS Tax Lien?

An IRS tax lien is the government’s legal claim against your property when you owe back taxes and don’t pay after being notified. It attaches to:

• Real estate (your home or land)

• Vehicles

• Business property

• Personal property

• Financial assets

It doesn’t take your stuff immediately — but it does make selling, refinancing, or borrowing much more difficult.

How Do You Get a Tax Lien?

The process looks like this:

1. The IRS assesses your tax liability.

2. They send you a bill (Notice and Demand for Payment).

3. You don’t pay or make arrangements.

4. They file a Notice of Federal Tax Lien (NFTL) in the public record.

   
   

Once filed, that lien is visible to creditors and anyone checking public records.

How a Lien Affects You

An IRS tax lien can:

• Damage your ability to get credit or loans (lenders don’t like standing behind the IRS).

• Complicate property sales (the IRS gets first claim on the money).

• Impact your business if you’re self-employed, since clients and partners may see the lien.

• Stay in place until the debt is paid or resolved.

  
  

💡 Good to know: Liens are no longer reported on standard consumer credit reports — but lenders still check public records.

How to Get Rid of a Tax Lien

There are several ways to deal with a lien, depending on your financial situation:

✅ Pay in full: The lien is released within 30 days.

✅ Set up a payment plan: Certain agreements may qualify you for lien withdrawal.

✅ Lien subordination: Lets other creditors move ahead of the IRS, often helpful for refinancing.

✅ Lien withdrawal: Removes the lien completely if you meet requirements (even before it’s paid off).

Each option has its own rules and paperwork — and professional guidance can save you time, stress, and money.

Can a Lien Lead to a Levy?

Yes. A lien is the IRS’s claim. A levy is when they actually seize your property. If you don’t act, a lien can eventually lead to wage garnishment, bank levies, or asset seizures.

That’s why it’s important not to ignore lien notices — they’re a warning sign that action is coming.

Final Thoughts

An IRS tax lien is serious, but it doesn’t have to ruin your financial future. With the right plan, you can get it released, withdrawn, or managed in a way that helps you move forward.

📅 If you’ve been hit with a lien, don’t wait until it escalates. Book your Tax Strategy Session today and let’s figure out the best way to protect your income, assets, and peace of mind.