What is the difference between a tax lien release and a tax lien discharge?

A release removes the lien from all your property — it happens when the debt is paid, the CSED expires, or the IRS accepts a bond. A discharge removes the lien from a specific piece of property (like a house you are selling) while the lien remains on your other assets.

How long does a federal tax lien stay on my credit report?

Federal tax liens were removed from consumer credit reports by the major bureaus (Equifax, Experian, TransUnion) in 2017 as part of the National Consumer Assistance Plan. However, the lien still appears in public records and can be found by lenders and title companies conducting property searches.

Can I sell my house if the IRS has a lien on it?

Yes, but the IRS lien must be addressed at closing. The lien attaches to the property, so the proceeds must either pay off the IRS debt in full, or you must obtain a lien discharge specific to that property before the sale.

IRS Tax Lien Release, Discharge, and Subordination: How to Remove a Federal Tax Lien

A Notice of Federal Tax Lien (NFTL) is the IRS’s legal claim against all of your current and future property — real estate, financial accounts, vehicles, and personal property — as security for an unpaid tax debt. It is filed in public records and can block financing, interfere with property sales, and damage business relationships.

There are three distinct mechanisms for addressing a federal tax lien: release, discharge, and subordination. Each serves a different purpose.

Lien Release: Full Removal

A lien release removes the lien from all your property. The IRS is required by law to release a lien within 30 days of any of the following:

The debt is paid in full (including penalties and interest)
The debt becomes legally unenforceable — the CSED expires
The IRS accepts a bond guaranteeing payment
An Offer in Compromise is accepted and the agreed amount is paid in full

The IRS issues a Certificate of Release of Federal Tax Lien and files it in the same public records where the lien was originally filed. Request this certificate from the IRS if you do not receive it within 30 days of qualifying.

After a Fresh Start policy change: Taxpayers in direct-debit installment agreements who owe $25,000 or less can request lien withdrawal (not just release) if they have made three consecutive on-time payments. A withdrawal removes the lien from public records entirely — a stronger outcome than a release, which merely marks the lien as satisfied.

Lien Discharge: Removal from Specific Property

A lien discharge removes the IRS lien from a specific piece of property — typically a house you want to sell — while the lien remains on all your other assets. This allows the sale to proceed without the lien blocking the title transfer.

The IRS will grant a discharge if:

The sale proceeds will be applied to the tax debt (the property’s value exceeds what the IRS will receive)
The government’s interest is adequately protected after the discharge (other assets remain subject to the lien)
You substitute other collateral for the discharged property

File Form 14135 (Application for Certificate of Discharge of Property from Federal Tax Lien) with the IRS. Allow at least 45 days for processing — longer if your situation is complex. Start this process well before your anticipated closing date.

Lien Subordination: Letting Other Creditors Go First

Lien subordination does not remove the lien. Instead, it lets another creditor’s claim take priority over the IRS’s lien for a specific purpose — most commonly to allow a mortgage refinance or new loan.

Lenders typically will not approve a loan if the IRS lien is senior (ahead of them) in priority. A subordination agreement makes the new lender’s claim senior, enabling the financing to proceed. The IRS benefits because a successful refinance often means you can use proceeds to partially or fully pay the debt.

File Form 14134 (Application for Certificate of Subordination of Federal Tax Lien).

Lien Withdrawal vs. Lien Release

These are often confused:

	Release	Withdrawal
Effect on lien	Marks it satisfied in public records	Removes it from public records entirely
Credit impact	Lien still shows (as released)	Lien disappears from public records
When available	Debt paid, CSED expired, bond, OIC	Direct-debit IA with ≤$25,000 and 3 on-time payments; after OIC accepted

A withdrawal is the stronger outcome. If you qualify, request it explicitly — the IRS does not automatically issue a withdrawal when a release would also satisfy the legal requirement.

Practical Steps After Lien Release

After your lien is released:

Obtain the Certificate of Release from the IRS (Form 668(Z))
File it in the same county recording office where the original lien was filed — this is required to update public property records
Send copies to any title companies or lenders who flagged the lien
Check your credit reports — since 2017, the bureaus should not be showing the lien, but verify

Sources

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