USTaxPenaltySaverIRS Tax Lien Relief Calculator
Determine your eligibility for lien withdrawal, subordination, or discharge. Fresh Start program thresholds and required IRS forms.
What is a Federal Tax Lien?
A federal tax lien is the government's legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government's interest in all your property, including real estate, personal property, and financial assets.
The IRS files a public document called a Notice of Federal Tax Lien (NFTL)to alert creditors that the government has a legal right to your property. This can:
- Damage your credit and ability to get loans
- Make it difficult to sell or refinance property
- Affect your business operations
- Show up in background checks
Three Types of Tax Lien Relief
Withdrawal
Form 12277
Removes the public Notice of Federal Tax Lien entirely, as if it was never filed.
Best For:
- • Paid in full or entered DDIA
- • Lien filed in error
- • Fresh Start eligible ($25K or less)
Fresh Start Threshold: $25,000 or less with DDIA
Subordination
Form 14134
Allows other creditors to move ahead of the IRS lien. Lien remains but takes lower priority.
Best For:
- • Refinancing your mortgage
- • Getting a new loan
- • Business financing needs
Key Test: Must benefit IRS collection
Discharge
Form 14135
Removes lien from specific property to allow sale. Lien remains on other assets.
Best For:
- • Selling property to pay taxes
- • Property has no equity (double value test)
- • Third-party buyer situations
Common Use: Home sale with IRS payoff
Fresh Start Program Thresholds
| Threshold | Amount | Benefit | IRC Section |
|---|---|---|---|
| Lien Filing Threshold | $10,000 | IRS won't file NFTL below this amount | IRM 5.12.2 |
| DDIA Withdrawal | $25,000 | Lien withdrawal with Direct Debit IA | § 6323(j) |
| Streamlined IA | $50,000 | No financial disclosure required | IRM 5.14.5 |
Required IRS Forms
Form 12277
Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien
Download Form →Key Legal References
IRC § 6323(j) - Withdrawal
Authorizes IRS to withdraw a filed notice of lien if filing was premature, taxpayer entered installment agreement, or withdrawal facilitates collection.
IRC § 6325(b) - Discharge
Allows discharge of specific property from the lien when fair market value is paid, property has no value, or interest of the US is worthless.
IRC § 6325(d) - Subordination
Permits subordination when it will not affect the government's position and will facilitate tax collection.
IRM 5.12.2 - Fresh Start
Internal Revenue Manual guidance on lien thresholds and withdrawal procedures under the Fresh Start initiative.
Frequently Asked Questions
Common questions about IRS tax lien relief options
A federal tax lien is the government's legal claim against your property when you fail to pay a tax debt. It attaches to all your assets (real estate, vehicles, financial accounts) and can affect your credit. The IRS files a Notice of Federal Tax Lien (NFTL) publicly to alert creditors.
Withdrawal (Form 12277) removes the public Notice of Federal Tax Lien entirely - best after paying in full or setting up a DDIA. Subordination (Form 14134) allows another creditor to move ahead of the IRS lien - useful for refinancing. Discharge (Form 14135) removes the lien from specific property - typically used when selling property to pay taxes.
Under the IRS Fresh Start program, you may qualify for lien withdrawal if: (1) You owe $25,000 or less, (2) You've entered into a Direct Debit Installment Agreement (DDIA), (3) You've made 3 consecutive payments, and (4) You're current on all filing and payment obligations. The lien is withdrawn but NOT released - you must still pay.
Yes. Tax liens were removed from credit reports in 2018, but the NFTL is still public record. Getting a lien withdrawal (Form 12277) removes the public notice entirely. This is better than just getting the lien released, which only shows the debt was paid.
Processing times vary: Withdrawal typically takes 30-45 days after approval. Subordination takes 45-60 days. Discharge takes 45-90 days depending on complexity. Expedited processing may be available for time-sensitive transactions like property sales.
Under Fresh Start, the IRS generally won't file a Notice of Federal Tax Lien if your total tax debt is under $10,000. If a lien was filed for amounts at or below this threshold, you may have grounds to request withdrawal.
Check Your Lien Relief Eligibility
Our calculator helps you determine which type of lien relief you qualify for and generates the required documentation.
Related Resources
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Relief from joint tax liability.
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Partial payment installment agreement.
Learn more →Failure-to-File Penalty
5% per month, max 25%. IRC 6651(a)(1).
Learn more →