IRS Lien Release Form: How to Remove a Tax Lien Quickly

Latest Facts and News

• In February 2025, the IRS filed a federal tax lien of $391,332.53 against Zertuche Construction & Management Service LLC. 
• Between February 3 and February 7, 2025, in Laredo, Texas, USA, the IRS filed a $391,332.53 lien against Zertuche Construction & Management Service LLC and released a separate $110,002.28 lien for the same company.

A federal tax lien can put your assets, credit, and financial stability at risk. If you’ve received a lien notice, removing it quickly is a top priority. One way to do this is through an IRS Lien Release Form, which officially removes the IRS’s claim over your property, but qualifying for a release depends on your situation.

So, How to remove a federal tax lien? This guide will walk you through when the IRS issues a lien release, how to speed up the process, and what steps you can take to remove a tax lien as quickly as possible.

What Is an IRS Lien Release Form?

The effects of a federal lien on taxes should be considered before moving on to its broader implications. This lien gives the government ownership over all your property, including real property, personal property, and bank accounts, in case you do not pay your tax bills.

The Lien Becomes Active When →

• The IRS assesses your tax liability.
• A Notice and Demand for Payment is sent.
• You neglect or refuse to pay the debt in time.

Effects of a Tax Lien →

• It can prevent asset sales or refinancing.
• It can affect business credit and operations.
• It can lead to IRS enforcement actions, such as wage garnishment or levies.
• It remains publicly recorded, impacting your financial reputation.

After filing a Notice of Federal Tax Lien (Form 668(Y)), the IRS informs all creditors of its legal rights over the property. And to remove this lien, an IRS lien release form must be issued. Once the lien is released, the IRS relinquishes its claim, restoring your full ownership rights to your assets.

When Does the IRS Release a Tax Lien?

The IRS releases a tax lien when:

• The full tax debt is paid.
• Demonstrating significant financial hardship.
• The IRS determined the lien was filed in error.
• The statute of limitations for collection (usually 10 years) expires.
• You qualify for a lien withdrawal or subordination under the IRS Fresh Start Program.
• A settlement, like an offer in compromise (a negotiated agreement to pay less than the total due tax), is accepted.
• The IRS may release the lien if you set up an installment agreement and consistently meet the payment terms, demonstrating financial compliance and reliability over a period of time.

Once the IRS confirms one of these conditions, they typically issue Form 668(Z) IRS lien release within 30 days, officially removing the lien.

How to Apply for an IRS Lien Release?

Removing a tax lien isn’t as complicated as it sounds. If you meet the criteria for a lien release, follow this step-by-step guide on how to apply for IRS lien release:

Step 1: Verify Your Tax Debt Status and Lien Details

Verify that all taxes are paid off. You can use the IRS Online Account or call the IRS for verification. Check your account balance information through the IRS Online Account or by dialing the IRS directly.

Confirm the lien details by checking the IRS Notice of Federal Tax Lien. You can obtain your IRS tax transcript for detailed information regarding your outstanding debt and lien by asking the IRS for its release.

Step 2: Confirm Your Eligibility

First, ensure you’re eligible for a lien withdrawal or release. The IRS typically releases liens under the following conditions:

• The statute of limitations (usually 10 years) on tax collection has expired.
• You have entered into a bond agreement to satisfy the tax debt.
• You have been approved for an Offer in Compromise (OIC) and met the terms of the agreement.
• If you fulfill the requirements of the IRS Fresh Start Program, you can obtain a lien withdrawal or subordination.
• If a lien was mistakenly filed, you may request its withdrawal using Form 12277 (Application for Withdrawal of Filed Notice of Federal Tax Lien). Form 13794 is an internal IRS document used only by IRS employees to process lien releases and is not filed by taxpayers.
• If you want a lien lifted from one particular property, you should file Form 14135 (Application for Certificate of Discharge).

Step 3: Determine  and Complete the Appropriate Form

• Form 12277: Taxpayers need Form 12277 to petition for removing a filed Notice of Federal Tax Lien (NFTL) when both the filing was inaccurate or withdrawal helps tax collection efforts. Provide taxpayer information, details of the NFTL, and the reason for withdrawal. Attach a copy of the NFTL if available.
• Form 14135: When you need to remove a lien from a particular property before a sale or refinancing event, Form 14135 should be used to obtain a Certificate of Discharge. Include taxpayer information, details of the property, and the reason for discharge. Attach relevant documentation, such as property appraisals or sales contracts.

Step 4: Submit the Form

Submit the completed form and all required documents to the IRS office as given in the form instructions through mail.

Step 5: Monitor Your Lien Status

After submission, check the IRS database to confirm the release. You can also contact the IRS directly to verify that your lien is removed from public records. The IRS usually takes 30 days to process requests. Follow up if you don’t receive a response within 30-45 days. 

Bonus Read → How to Remove a Tax Lien from Your Property Texas CPA Firm?

Step 7: Confirm Lien Release

Once the IRS grants your request, ensure the lien is removed from: 

• IRS Online Account (to confirm status).
• County Recorder’s Office (to update public records).
• Your Credit Report (notify creditors of lien removal).

For detailed instructions and required forms, refer to the IRS publications

If you need help with the process or your financial case requires expert attention, Hopkins CPA Firm is the best option. We have an expert team for tax resolution services to help you achieve fast and efficient lien release.

How Long Does It Take for the IRS to Release a Lien?

When you meet the requirements for a lien release, the IRS will take an average of 30 days to lift the levy. The time it takes for case processing could differ from one situation to another. 

Payment plan applications extend the processing time beyond the standard period. The process requires patience, yet you should ask for an update if needed when it extends longer than expected.

How to Speed Up IRS Lien Release?

To fast-track the IRS lien release process, consider these strategies:

• Pay your tax debt in full to trigger an automatic release.
• You should ask for a fast release if you require urgent attention.
• Having your application checked by a tax expert will help maintain its accuracy.
• Submit a qualifying application to the IRS Fresh Start program.

Does an IRS Lien Release Improve Your Credit Score?

Yes, an IRS lien release form can help your credit score recover. While a lien release helps credit scores recover, federal tax liens no longer appear on consumer credit reports (since 2018, per major credit bureaus). This can improve your creditworthiness over time. 

A lien release may help you secure loans, refinance your mortgage, or access credit more easily.

IRS Lien Release vs. Lien Withdrawal

The IRS lien release form removes the lien but does not erase it from credit reports. However, to remove all traces of the lien, you must request a lien withdrawal by submitting Form 12277.

If restoring credit is a priority, a lien withdrawal is the better option.

How to Avoid Future IRS Tax Liens?

Avoiding tax liens is important for financial stability. Here’s how you can prevent it in the future:

1. Set Up Payment Plans

If you owe taxes and qualify under IRS tax debt relief options, establish an installment agreement with the IRS as soon as possible. This prevents liens and allows structured payments over time. 

2. File Taxes on Time

Taxpayers who file their taxes after the deadline expose themselves to increased chances of IRS enforcement measures, including liens. You should always file your tax returns by the deadline, regardless of your payment capabilities. 

3. Monitor IRS Notices

Disregarding IRS correspondence will trigger aggressive collection procedures from the service. Quickly reply to any IRS notices or letters to normalize your tax situation before your problem progresses.

4. Stay Current on Tax Filings

Even if you owe taxes, filing on time can prevent unnecessary penalties and keep you eligible for relief programs.

5. Use the IRS Fresh Start Program

This initiative offers options like lien withdrawals and flexible payment plans to help taxpayers avoid liens.

6. Keep Accurate Financial Records

Maintaining well-documented financials ensures you report taxes correctly, reducing the risk of IRS discrepancies.

Also Read→ How long does it take to file your taxes?

Removing Tax Liens Made Simple with Hopkins CPA Firm

Removing a tax lien is not as easy as it seems. It requires expertise and in-depth knowledge of forms, documentation, procedures, and IRS requirements. This is where Hopkins CPA Firm comes in.

We handle the entire process, from filing the right forms to negotiating with the IRS and ensuring your lien is removed as quickly and smoothly as possible. But we don’t stop there. Beyond IRS tax lien removal, we help you stay ahead of future tax issues with strategic tax planning and compliance support.

Let the Hopkins CPA Firm take the stress off your shoulders. Contact us today and get expert assistance tailored to your situation.