How to Release an IRS Tax Lien: Steps and Requirements

Overview

An IRS tax lien is a legal claim the federal government places on your property—real estate, financial accounts, and other assets—when you fail to pay federal taxes. Releasing an IRS tax lien clears that legal claim so you can sell, refinance, or otherwise transfer property free of the lien. The IRS generally issues a Certificate of Release of Federal Tax Lien after the underlying liability is resolved or other qualifying conditions are met (IRS: Notice of Federal Tax Lien).

In my 15 years advising clients on tax collection issues, I’ve seen the process drag when people assume a lien automatically disappears. Proactively following the IRS’s procedures, documenting every step, and using the right relief option will speed release and prevent surprises at closing.

Sources: IRS Notice of Federal Tax Lien page and the IRS pages on Offers in Compromise and installment agreements (see links below).

Key ways a tax lien is released

A federal tax lien can be released in several common ways. Each path has paperwork, timelines, and tradeoffs:

1) Full payment of the liability

• If you pay the tax, penalties, and interest in full, the IRS will issue a Certificate of Release of Federal Tax Lien. The IRS typically records that release within 30 days after full payment is processed, but timing can vary depending on local recording offices and IRS processing queues (IRS: Notice of Federal Tax Lien).

2) Expiration of the Collection Statute

• A tax lien generally lapses when the IRS’s collection statute of limitations expires (usually 10 years from assessment, subject to certain tolling events). When the statute runs, the lien will be released or will no longer be enforceable. Confirm with the IRS and local recorder.

3) Full or partial discharge of property

• The IRS can discharge (remove) the lien from specific property so you can sell or refinance that asset. Discharge requires applying to the IRS and providing documentation about the proposed transaction and value of the property.

4) Subordination

• Subordination doesn’t remove the lien; it lowers the lien’s priority so lenders can make loans that are senior to the federal lien. Subordination is useful when refinancing; the IRS will consider the benefit to its collection position.

5) Withdrawal of the Notice of Federal Tax Lien

• Under limited circumstances the IRS will withdraw a filed Notice of Federal Tax Lien, which can help credit standing. Withdrawal is discretionary and typically considered when withdrawal would facilitate collection (for example, prompt full payment by refinancing or if filing the notice was premature).

6) Offer in Compromise (OIC)

• When an OIC is accepted and the terms have been met, the IRS will issue a release or adjust the lien according to the OIC terms. Not all OICs eliminate liens; sometimes liens remain to secure future tax liability.

For procedural detail and eligibility rules, see IRS resources on Offers in Compromise and Installment Agreements.

Step-by-step: How to get the lien released (practical checklist)

Follow this checklist to reduce delays and ensure the release is recorded correctly.

1. Confirm the lien details

• Request a transcript or account transcript from the IRS to verify the assessed tax, penalties, and interest. Confirm the Notice of Federal Tax Lien was actually filed (some taxpayers receive notices before public filing).

1. Choose the right path

• If you can pay in full, that is the fastest route to a release. If you cannot, evaluate whether an installment agreement, Offer in Compromise, discharge for specific property, or withdrawal is appropriate. In practice, many clients choose either an installment agreement or OIC—see FinHelp’s guides on negotiating installment agreements and Offers in Compromise for eligibility and documentation tips (internal: Practical Guide to Negotiating an Installment Agreement; When an Offer in Compromise Could Be the Right Move).

1. Complete required applications and forms

• For payment in full: provide proof of payment and request the Certificate of Release. The IRS will issue the release once payment posts.
• For discharge or subordination: complete the IRS form or application the IRS specifies for that action (the IRS collection office handling the lien will supply the form and a checklist of required documentation).
• For OIC: submit Form 656/656-B and required financial statements. If accepted, follow the OIC terms to completion.

1. Follow up with the IRS office

• Confirm the IRS has processed the payment or accepted the arrangement and ask when the Certificate of Release will be recorded. Get a case or request number.

1. Check public recording/recorder’s office

• The IRS typically files the release with the county recorder where the lien was filed. Verify the release shows up in county land records and credit reports. Sometimes the IRS records the release but the county recorder delays indexing; follow up with both agencies.

1. Get written confirmation

• Keep the IRS release certificate, payment receipts, and any correspondence. If you sold property, keep closing statements showing lien payoff.

Timelines and what to expect

• Payment in full: IRS generally issues the Certificate of Release within 30 days after payment posts, but county recording can add days to weeks. Plan for 30–60 calendar days in total to see the public record updated.
• Installment Agreements: A lien may remain in place during installment terms. Some agreements (short-term agreements) may lead to withdrawal in limited cases if withdrawal will aid in obtaining financing.
• Offer in Compromise: Processing times vary; acceptance and clearance of terms are required before release actions.
• Discharge or Subordination requests: Processing times differ by IRS office and case complexity; expect multiple weeks and be prepared to supply additional documentation.

These time estimates reflect current IRS guidance and real-world processing variability as of 2025 (IRS collections pages).

Common mistakes that delay release

• Missing documentation: Not supplying required financials or closing documents for discharge/subordination requests.
• Assuming the lien is removed immediately: The IRS issues a Certificate of Release, but recording and credit updates can lag.
• Paying the wrong account or posting errors: Always get written confirmation and match payment to the specific assessment.
• Relying on verbal promises: Insist on written confirmations and case numbers.

Real-life example (anonymized)

A client with a filed lien on a home negotiated an Offer in Compromise because full payment was impossible. After acceptance, we submitted the OIC payment and requested the lien release. The IRS accepted the payment and issued a Certificate of Release; my team verified the county recorder had indexed the release and the client cleared escrow to sell the property three weeks later. The critical steps were complete documentation, confirming IRS recording, and checking county records.

Practical tips to speed the process

• Ask the IRS for the expected release filing date and the name of the person who will file the Certificate of Release. Ask for a case number.
• Use certified or trackable payment methods and retain proof.
• If refinancing or selling, coordinate with the lender/closing agent so they know to expect the release.
• Consider professional help if the lien is complex; a tax attorney or enrolled agent can navigate discharge and subordination requests.

Where to learn more (authoritative sources)

• IRS: Notice of Federal Tax Lien — https://www.irs.gov/businesses/small-businesses-self-employed/notice-of-federal-tax-lien
• IRS: Offer in Compromise — https://www.irs.gov/individuals/offer-in-compromise
• IRS: Installment Agreements — https://www.irs.gov/payments/installment-agreements

Internal related articles:

• Practical Guide to Negotiating an Installment Agreement: https://finhelp.io/glossary/practical-guide-to-negotiating-an-installment-agreement/
• How to Get a Tax Lien Released After Full Payment: https://finhelp.io/glossary/how-to-get-a-tax-lien-released-after-full-payment/
• When an Offer in Compromise Could Be the Right Move: https://finhelp.io/glossary/when-an-offer-in-compromise-could-be-the-right-move/

Frequently asked brief answers

• How long until the lien is gone? Expect 30–60 days after final IRS processing and county recording, though timelines vary.
• Will an Offer in Compromise remove the lien? Sometimes; read the OIC decision letter carefully and meet its terms.
• Can I force the IRS to release a lien? Not usually; you must meet payment terms or qualify for discretionary actions like withdrawal or discharge of specific property.

Professional disclaimer
This article is educational and reflects current IRS guidance and my professional experience as a tax practitioner. It is not individualized tax or legal advice. Consult a qualified tax professional or the IRS before making decisions about liens, offers, or settlements.

If you want help evaluating options for a specific lien—including whether a discharge, subordination, installment agreement, or Offer in Compromise is best—consider working with a qualified tax representative who can review your account transcripts and supporting documents.