IRS letter help
Got IRS Letter 3172? What a Filed Tax Lien Means
Letter 3172 tells you the IRS has filed a public Notice of Federal Tax Lien for the balances listed, and gives you a right to a hearing if you ask for it by the date in the letter.
Reviewed by LaToya Clark-Thompson, FounderLast updated
What this letter is
Letter 3172 is notice that a Notice of Federal Tax Lien has been filed for the balances shown on the enclosed Form 668(Y)(c). A lien is the government’s legal claim against your property for an unpaid tax debt. The filed notice is a public record that alerts creditors to that claim.
A lien is not a levy. A lien secures the debt; a levy actually takes property such as wages or a bank balance. The two often come close together, which is why this letter deserves a prompt response.
What to do now
- Find the hearing deadline printed in the letter. To keep your Collection Due Process rights, the request must be made by that date, using Form 12153
- Check the balances on Form 668(Y)(c) against your own records and your IRS account
- Make sure every required return is filed. Every resolution option starts there
- Decide how the balance will be handled: full payment, a payment plan, or another option. See payment plan options
- If you missed the hearing deadline, you may still be able to request an equivalent hearing within the one-year period the letter and IRS Publication 1660 describe, though you generally cannot take that decision to Tax Court
What happens if you ignore it
The lien attaches to property you own now and property you acquire later, including real estate, vehicles and business assets, until it is released. It can make it hard to sell or refinance a home, can affect credit if a lender finds it in public records, and penalties and interest keep increasing the balance. If the debt is certified as seriously delinquent, it can also affect your passport.
The lien is released when the balance is paid in full, when the collection period runs out, or once the terms of an accepted offer in compromise have been paid. Some taxpayers can also ask for the filed notice to be withdrawn in certain circumstances, which removes the public notice, so it is worth asking about once the balance is under control.
How we help
First we find out what the lien covers. We pull your IRS account transcripts, confirm the balances by year, and file any returns still missing through back tax filing, because unfiled years block every option. We then put together the income, expense and asset information that a payment plan or other arrangement will need.
A Collection Due Process hearing, a lien withdrawal request, or any conversation with the IRS on your behalf is handled by the independent licensed CPA we work with, with our office coordinating. See tax resolution.
What to send us
- Every page of Letter 3172 and the enclosed Form 668(Y)(c), through the secure client portal
- Any other IRS letters from the last several months, especially CP504 or LT11
- Copies of the returns for the years listed, and a note of any years not filed
- Recent pay stubs or business income records, bank statements, and a list of what you own and owe
Frequently asked questions
Does a federal tax lien mean the IRS will take my house?
Not by itself. A lien is a claim that secures the debt; it does not take anything. Seizing property is a levy, which is a separate step with its own notices. A lien does make selling or refinancing harder, because the IRS claim usually has to be paid or dealt with at closing.
How do I request a Collection Due Process hearing for a lien?
Use Form 12153, Request for a Collection Due Process or Equivalent Hearing, and make the request by the deadline shown in your Letter 3172. In the hearing you can raise collection alternatives such as a payment plan, and in some cases challenge the balance. Missing the date leaves only the more limited equivalent hearing.
Will the lien go away if I set up a payment plan?
Not automatically. The lien is released when the balance is paid in full or otherwise resolved. However, the IRS has rules under which a filed lien notice can be withdrawn, including for some taxpayers paying by direct debit installment agreement, so a payment plan can be the route toward removing the public notice.
What is the difference between a lien release and a lien withdrawal?
A release means the debt is satisfied or no longer collectible and the lien no longer attaches to your property. A withdrawal removes the public Notice of Federal Tax Lien as if it had not been filed, and can happen before the debt is fully paid in certain situations. Publication 1450 covers how to request a certificate of release.
Not the question you had? The full tax FAQ covers more ground, and our client reviews say what the work is actually like.
Related pages
CP504 notice
Notice of intent to levy. The IRS can take a state refund and warns about wages and bank accounts next.
Learn moreLT11 / CP90 final notice
The final notice before levy, with a Collection Due Process hearing right that runs from the letter date.
Learn moreIRS payment plan options
The Simple Payment Plan, other installment agreements, short-term plans, hardship status and offers.
Learn moreLetter 1153 (trust fund recovery penalty)
A proposal to hold you personally liable for a business’s unpaid payroll taxes. An appeal window applies.
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