A lien is a legal claim; a levy is a seizure. The two are related but operate under separate statutes and require separate strategies. Getting a lien withdrawn under Form 12277 can restore credit while a levy release under Form 668-D restores access to income.
An at-a-glance view of every step covered in this guide.
The statutory lien under §6321 arises automatically when tax is assessed and unpaid. The NFTL under §6323 is a public filing that gives the government's claim priority over subsequent creditors. A levy under §6331 is the physical seizure of property (wages, bank funds, receivables). You can have a lien without a levy — and vice versa.
A lien release (after payment or acceptance of an OIC) leaves the NFTL on the public record with a 'released' notation. A withdrawal under Form 12277 removes the NFTL as though it never existed — the correct request when the taxpayer qualifies for Fresh Start withdrawal (balance under $25,000, direct-debit IA in place, three payments made).
Subordination (Form 14134) lets a lender's mortgage take priority so a refinance or sale can close. Discharge (Form 14135) removes the lien from a specific property (e.g., to allow a home sale) while leaving the lien on other assets. Both are essential tools for taxpayers with real estate.
The three major bureaus stopped reporting NFTLs in 2018, so direct credit-score damage has decreased. But mortgage lenders and business underwriters still search public records and will see it.
Yes — either by paying from proceeds at closing, or by filing Form 14135 (Discharge) so the lien attaches only to remaining assets. Plan 45–60 days ahead.
Fresh Start withdrawals via Form 12277 typically process in 30–45 days once eligibility is documented.
Payment triggers a release under §6325, but the NFTL stays on the public record with a 'released' notation. A separate Form 12277 request is needed to have it withdrawn as though never filed.
A licensed tax attorney will pull your IRS transcripts, review your situation, and walk you through the resolution options that fit — no obligation.