Letter 3172 is the IRS telling you it has filed a Notice of Federal Tax Lien against you in the public records. It is formally called a notice of federal tax lien filing and your right to a hearing. It comes with a copy of the lien notice and a Form 12153, the form for requesting a hearing.
The lien notice is already on file. The hearing right is not permanent. You need to look at the date on this letter today.
The lien itself versus the lien notice
Two different things are going on, and the difference matters.
The lien. Under Internal Revenue Code section 6321, when you owe a tax and do not pay after notice and demand, a lien arises in favor of the United States on all your property and rights to property. Section 6322 says the lien arises when the tax is assessed and continues until the liability is paid or becomes unenforceable because time runs out. This lien exists whether or not anything is filed.
The Notice of Federal Tax Lien (NFTL). This is the public filing, usually with the county recorder or the state office designated under section 6323(f). Under section 6323(a), the lien is not valid against purchasers, secured lenders, mechanic's lienors and judgment lien creditors until the notice is filed. Filing the notice is how the IRS puts the world on notice and protects its place in line.
What a filed lien notice does in real life
- It clouds title to real estate. Title companies find it. A sale or refinance usually cannot close without dealing with it. See when an IRS lien is blocking a home sale.
- It attaches to property you acquire later. The lien reaches property and rights to property, including assets you get after the filing.
- It can affect business relationships. Lenders, landlords, and some customers and vendors run public records searches.
- Credit reports are a separate question. Whether a tax lien shows up on a consumer credit report depends on the credit bureaus' own policies, and the IRS's own manual (IRM 5.12.9) notes there have been changes in the credit reporting industry. Do not assume either way. The notice remains a public record that anyone can search.
Your deadline: the 30-day hearing window
Section 6320(a) requires the IRS to notify you in writing within 5 business days after it files the lien notice. You then have a 30-day period, beginning the day after that 5-business-day period, to request a Collection Due Process (CDP) hearing. The letter states the deadline date. Use it.
The hearing is held by the IRS Independent Office of Appeals, before an officer who had no prior involvement with the tax, under section 6320(b). At the hearing, section 6330(c), which section 6320(c) incorporates, lets you raise:
- Whether the IRS followed the law and its procedures in filing the notice.
- Challenges to the appropriateness of the collection action, including asking that the notice be withdrawn.
- Collection alternatives, such as an installment agreement or an offer in compromise.
- Spousal defenses, where they apply.
- The underlying amount, but only if you did not receive a notice of deficiency or otherwise have a chance to dispute it.
If you disagree with the Appeals determination, section 6330(d), applied through section 6320(c), lets you petition the Tax Court within 30 days of the determination.
Talking to the collection employee does not extend the deadline. The Treasury Regulation (26 C.F.R. 301.6320-1) says those discussions do not suspend or extend the 30-day period. If you miss it, the same regulation allows a written request for an equivalent hearing within one year, beginning the day after the 5-business-day notification period. An equivalent hearing is still with Appeals, but it does not carry the same right to Tax Court review.
Four ways to deal with a filed lien
| Remedy | Law | What it does |
|---|---|---|
| Release | IRC 6325(a) | Extinguishes the lien. The IRS must issue a certificate of release within 30 days after the liability is fully paid or becomes legally unenforceable, or after it accepts a qualifying bond. |
| Withdrawal | IRC 6323(j) | Treats the filed notice as if it had never been filed. The tax can still be owed. |
| Discharge | IRC 6325(b) | Removes the lien from a specific piece of property, often so it can be sold. |
| Subordination | IRC 6325(d) | Lets another creditor move ahead of the IRS, often for a refinance that helps you pay. |
Withdrawal
Under section 6323(j)(1), the IRS may withdraw a lien notice if it was filed prematurely or not in accordance with IRS procedures; if you entered into an installment agreement to pay the tax, unless the agreement says otherwise; if withdrawal will help collect the tax; or, with your consent or the National Taxpayer Advocate's, if withdrawal is in your best interest and the government's. Taxpayers generally request it on Form 12277.
The IRM (5.12.9) describes a common path: a direct debit installment agreement where the unpaid assessed balance is $25,000 or less, the debt will be paid within 60 months or before the collection statute expires (whichever comes first), you are otherwise compliant, and at least three consecutive direct debit payments have been made. The IRS may also consider withdrawal after release once a liability is paid.
After a withdrawal, section 6323(j)(2) says the IRS will, at your written request, make reasonable efforts to notify credit reporting agencies and any creditors you name.
Release
If you pay in full, the lien must be released within 30 days under section 6325(a). The Letter 3172 package includes Publication 1450, which explains how to request a certificate of release if you do not receive one.
Discharge and subordination
Selling a property? A certificate of discharge (Form 14135, with instructions in Publication 783) can remove the lien from that one asset, often in exchange for paying the government's interest from the sale. Refinancing? A certificate of subordination (Form 14134, Publication 784) can let the new lender go first when that helps the IRS get paid.
What to do right now
- Find the hearing deadline on the letter and put it on your calendar.
- Decide whether to request a CDP hearing on Form 12153. State your grounds in writing. Section 6320(b)(1) requires a written request that states the grounds.
- Keep proof of mailing. Certified mail with a receipt is the simple way.
- Get current on filing, since withdrawal and payment options generally require it.
- Figure out what you are trying to accomplish. A pending sale, a refinance, a business loan, or simply a manageable payment plan each point to a different remedy.
What not to do
- Do not ignore the 30-day window because the lien is "already filed." The hearing is your best chance to ask for withdrawal with Tax Court review behind it.
- Do not transfer property to relatives to get around the lien. The lien generally follows the property, and transfers can create new problems.
- Do not assume paying off the balance makes the record disappear. Release and withdrawal are different. Ask for the one you need.
- Do not sign a closing statement that assumes the lien will be dealt with later. Get the discharge or payoff worked out first.
Getting help
A lien notice is often the moment a tax problem goes public. If you have a sale, refinance or business deal on the line, or you want to ask for withdrawal, it helps to have a tax attorney in the hearing request from the start. You can reach our office through GetIRSHelp.com or at (813) 229-7100.
Frequently asked questions
How long do I have to request a hearing after Letter 3172?
Section 6320 requires the IRS to notify you within 5 business days after filing the lien notice. You then have 30 days, beginning the day after that 5-business-day period, to request a Collection Due Process hearing. The deadline date appears on the letter.
What is the difference between lien withdrawal and lien release?
A release under section 6325(a) extinguishes the lien, typically after the debt is paid in full. A withdrawal under section 6323(j) treats the filed notice as if it had never been filed, and it can happen even while a balance remains, such as under a qualifying installment agreement.
Will an IRS lien show up on my credit report?
That depends on the credit bureaus' own policies, which have changed over time. Regardless, the Notice of Federal Tax Lien is a public record that lenders and title companies can find. After a withdrawal, you can ask the IRS in writing to notify credit reporting agencies.
Can I sell my house with an IRS lien on it?
Often yes, but the lien must be dealt with. A certificate of discharge under section 6325(b), requested on Form 14135, can remove the lien from that property, usually in exchange for paying the government's interest from the sale proceeds.
What if I missed the 30-day deadline?
Under the Treasury Regulations, you can request an equivalent hearing with Appeals within one year, beginning the day after the 5-business-day notification period. It does not carry the same right to Tax Court review. You can also request a withdrawal or other lien certificate at any time.
This guide is general information, not legal advice. Tax law changes and every case turns on its own facts.