FEDERAL TAX LIEN RELEASE REQUEST LETTER

Taxpayer Information

[__/__/____]

Internal Revenue Service
Advisory Group Manager
Centralized Lien Operation
[________________________________]
[________________________________]

Via Certified Mail, Return Receipt Requested

Alternate Address (if assigned Revenue Officer):
Internal Revenue Service
Attn: Revenue Officer [________________________________]
[________________________________]
[________________________________]

Re: Request for [Release / Withdrawal / Discharge / Subordination] of Federal Tax Lien
Taxpayer: [________________________________]
SSN/EIN: [________________________________]
Tax Period(s): [________________________________]
NFTL Serial Number: [________________________________]
NFTL Recording Date: [__/__/____]

To Whom It May Concern:

I write to request [a Certificate of Release of Federal Tax Lien / Withdrawal of the Notice of Federal Tax Lien / a Certificate of Discharge / a Certificate of Subordination] pursuant to Internal Revenue Code ("IRC") § 6325 [and/or IRC § 6323(j)] with respect to the Notice of Federal Tax Lien (NFTL) filed against the above-named taxpayer. The factual and legal basis for this request is set forth below.

I. BACKGROUND — FEDERAL TAX LIEN OVERVIEW

A. The Statutory Lien (IRC § 6321)

Under IRC § 6321, if any person liable to pay any tax neglects or refuses to pay after notice and demand, the amount (including interest and penalties) shall be a lien in favor of the United States upon all property and rights to property belonging to such person. The lien arises at the time the assessment is made (IRC § 6322) and continues until the liability is satisfied or becomes unenforceable by reason of lapse of time (the Collection Statute Expiration Date, or "CSED," generally 10 years from the date of assessment under IRC § 6502).

B. Notice of Federal Tax Lien (NFTL)

The NFTL is a public document filed with the applicable state or local recording office to put creditors and other interested parties on notice of the government's interest in the taxpayer's property. The NFTL does not itself create the lien — the lien exists by operation of law — but it establishes the government's priority against certain third-party creditors (IRC § 6323(a)).

C. Types of Lien Relief

There are four distinct forms of lien relief, each governed by different provisions:

II. REQUEST FOR RELEASE OF FEDERAL TAX LIEN — IRC § 6325(a)

☐ This section applies — I request a Certificate of Release of Federal Tax Lien

A. Grounds for Release

Under IRC § 6325(a), the IRS shall issue a certificate of release of a lien imposed under IRC § 6321 no later than 30 days after the earliest of the following:

☐ (1) Liability satisfied: The liability for the amount assessed, together with all interest and additions to tax, has been fully satisfied or has become legally unenforceable.

• Date liability was paid in full: [__/__/____]
• Method of payment: [________________________________]
• Proof of payment enclosed: ☐ Yes
• IRS account transcript showing zero balance enclosed: ☐ Yes

☐ (2) Bond accepted: The IRS has accepted a bond that is conditioned upon the payment of the amount assessed, together with all interest and additions, within the time prescribed by law.

• Bond amount: $[________________]
• Surety: [________________________________]
• Bond documentation enclosed: ☐ Yes

☐ (3) Collection Statute Expiration Date (CSED) expired: The statutory period for collection has expired, making the liability legally unenforceable.

• Assessment date: [__/__/____]
• CSED (10 years from assessment): [__/__/____]
• Extensions of CSED (if any): [________________________________]
• Current date is beyond the CSED: ☐ Yes

B. Self-Releasing Liens

Under IRC § 6325(a) and IRM 5.12.3.4.1, the NFTL should self-release when:
- The CSED expires
- The liability is fully paid

However, the IRS does not always file certificates of release promptly. If the lien should have self-released but has not, this letter serves as a formal request for the IRS to issue the Certificate of Release.

C. Timeline for Release

The IRS is required to issue the Certificate of Release within 30 days of the date on which the condition for release is satisfied (IRC § 6325(a)). If the IRS fails to timely release the lien, the taxpayer may have a cause of action for damages under IRC § 7432 (Civil Damages for Failure to Release Lien).

III. REQUEST FOR WITHDRAWAL OF NOTICE OF FEDERAL TAX LIEN — IRC § 6323(j)

☐ This section applies — I request Withdrawal of the NFTL (Form 12277)

A. Grounds for Withdrawal

Under IRC § 6323(j)(1), the IRS may withdraw a notice of federal tax lien if:

☐ (A) The filing of the notice was premature or otherwise not in accordance with IRS administrative procedures.

Explanation: [________________________________]

☐ (B) The taxpayer has entered into an installment agreement under IRC § 6159 to satisfy the tax liability for which the lien was imposed by means of an installment agreement, unless such agreement provides otherwise.

• Installment agreement date: [__/__/____]
• Monthly payment amount: $[________________]
• Agreement number: [________________________________]
• Payments are current: ☐ Yes

Note: For installment agreements, the taxpayer generally must:
1. Be in compliance with all filing requirements
2. Make three consecutive direct debit payments (for DDIA) or be current on all payments
3. Owe $50,000 or less (for streamlined agreements requesting withdrawal)
4. Authorize direct debit if not already enrolled (IRM 5.12.9.3.1)

☐ (C) Withdrawal of the notice will facilitate the collection of the tax liability.

Explanation: [________________________________]

☐ (D) Withdrawal of the notice would be in the best interest of the taxpayer (as determined by the National Taxpayer Advocate) and the United States.

Explanation: [________________________________]

B. Form 12277 — Application for Withdrawal

☐ Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien, is enclosed
☐ All required information has been provided on the form
☐ Alternatively, this letter constitutes a written request containing all necessary information (any written request containing the required information may be accepted per IRM 5.12.9.2)

C. Effect of Withdrawal vs. Release

Important distinction:
- A withdrawal removes the NFTL from public record, as if it had never been filed. However, the underlying statutory lien under IRC § 6321 remains in effect.
- A release extinguishes both the NFTL and the statutory lien.

A withdrawal is useful when:
- The taxpayer needs to improve their credit report
- The NFTL was prematurely filed
- The taxpayer has entered into an installment agreement and needs the NFTL removed to facilitate compliance

D. Notification to Credit Agencies

Under IRC § 6323(j)(2), upon withdrawal, the IRS will provide a copy of the withdrawal notice to any financial institution or creditor specifically designated by the taxpayer.

☐ I request that the IRS send a copy of the withdrawal notice to:
- [________________________________] (financial institution/creditor name and address)
- [________________________________] (financial institution/creditor name and address)

IV. REQUEST FOR DISCHARGE OF PROPERTY — IRC § 6325(b)

☐ This section applies — I request a Certificate of Discharge for specific property

A. Grounds for Discharge

Under IRC § 6325(b), the IRS may issue a certificate of discharge of any or all property subject to the federal tax lien under the following circumstances:

☐ (1) Property with value not exceeding the lien (IRC § 6325(b)(1)): The fair market value of the remaining property subject to the lien is at least double the amount of the unsatisfied liability secured by the lien and the amount of all other prior liens on the remaining property.

• Property to be discharged: [________________________________]
• Fair market value of property to be discharged: $[________________]
• Fair market value of remaining property: $[________________]
• Outstanding tax liability: $[________________]
• Other liens on remaining property: $[________________]
• Double test calculation: Remaining FMV ($[________________]) ≥ 2 × (Tax liability ($[________________]) + Other liens ($[________________]))

☐ (2) Partial payment (IRC § 6325(b)(2)): The interest of the United States in the property to be discharged is paid, or the IRS is paid an amount not less than the value of the government's interest in the property.

• Amount to be paid for discharge: $[________________]
• Basis for value determination: [________________________________]
• Appraisal enclosed: ☐ Yes ☐ No

☐ (3) Property interest of no value (IRC § 6325(b)(3)): The property subject to the lien has been sold through a foreclosure or similar proceeding, and the IRS's lien interest has no value.

☐ (4) Substitution of value (IRC § 6325(b)(4)): The taxpayer deposits cash or furnishes a bond equal to the government's interest in the specific property.

• Amount to be deposited/bonded: $[________________]
• Method: ☐ Cash deposit ☐ Surety bond

B. Property Information

• Type of property: ☐ Real property ☐ Personal property ☐ Vehicle ☐ Other: [____]
• Property address/description: [________________________________]
• Reason discharge is needed: ☐ Sale ☐ Refinance ☐ Foreclosure ☐ Other: [________________________________]
• Closing/transaction date: [__/__/____]
• Title company/closing agent: [________________________________]

C. Application for Certificate of Discharge

☐ IRS Form 14135 (Application for Certificate of Discharge of Property from Federal Tax Lien) enclosed
☐ Appraisal or comparable market analysis enclosed
☐ Proposed closing statement/HUD-1 enclosed
☐ Copy of the NFTL enclosed
☐ All encumbrances on the property identified

V. REQUEST FOR SUBORDINATION OF FEDERAL TAX LIEN — IRC § 6325(d)

☐ This section applies — I request a Certificate of Subordination

A. Grounds for Subordination

Under IRC § 6325(d), the IRS may issue a certificate of subordination of the federal tax lien to another interest if:

☐ (1) The amount paid to the IRS is not less than the amount by which the government's interest would be entitled in the normal course of events (essentially, the IRS receives what it would receive if the lien maintained its priority)

☐ (2) The subordination will ultimately increase the IRS's ability to collect the tax liability (e.g., by allowing the taxpayer to refinance and pay a portion of the tax from the proceeds, or by allowing the taxpayer to obtain business financing that will enable continued payment)

B. Explanation of How Subordination Facilitates Collection

[Explain in detail how allowing another creditor (such as a mortgage lender) to take priority over the IRS lien will result in greater collection for the government. For example:]

• The taxpayer seeks to refinance a mortgage, and the new lender requires first-priority position
• The refinance will generate $[________________] in proceeds that will be paid directly to the IRS
• Without subordination, the refinance cannot proceed, and the IRS will receive nothing
• With subordination, the IRS receives $[________________], which is more than its current interest in the property

[________________________________]
[________________________________]
[________________________________]

C. Application for Certificate of Subordination

☐ Application letter with full details enclosed
☐ Lender's commitment letter enclosed
☐ Proposed loan terms enclosed
☐ Appraisal or comparable market analysis enclosed
☐ Proposed distribution of proceeds enclosed
☐ Copy of the NFTL enclosed

VI. SUPPORTING DOCUMENTATION CHECKLIST

Please find the following documents enclosed with this request:

General Documentation

☐ Copy of the Notice of Federal Tax Lien (NFTL / Form 668(Y)(c))
☐ Copy of the IRS notice or letter referencing the lien
☐ IRS account transcript(s) showing the current balance for all periods
☐ Form 2848 (Power of Attorney and Declaration of Representative) — if represented
☐ Form 8821 (Tax Information Authorization) — if applicable

For Release (IRC § 6325(a))

☐ Proof of full payment (canceled checks, bank statements, IRS payment confirmations)
☐ IRS account transcript showing $0.00 balance
☐ Bond documentation (if applicable)
☐ Evidence that the CSED has expired (account transcript showing assessment dates)

For Withdrawal (IRC § 6323(j))

☐ Form 12277 (Application for Withdrawal of Filed Form 668(Y))
☐ Installment agreement confirmation letter
☐ Proof of three consecutive direct debit payments (bank statements)
☐ Evidence that all required returns have been filed

For Discharge (IRC § 6325(b))

☐ Form 14135 (Application for Certificate of Discharge)
☐ Property appraisal or comparable market analysis
☐ Title search showing all encumbrances
☐ Proposed closing statement / settlement statement
☐ Purchase agreement or refinance commitment letter
☐ Cash deposit or bond documentation (if substituting value)

For Subordination (IRC § 6325(d))

☐ Lender's loan commitment letter
☐ Proposed loan terms and conditions
☐ Property appraisal
☐ Calculation showing how subordination increases IRS collection
☐ Proposed distribution of proceeds

Other

☐ Damage documentation (if seeking IRC § 7432 damages for failure to release)
☐ Credit report showing impact of the NFTL
☐ Other: [________________________________]

VII. LEGAL AUTHORITIES AND ARGUMENTS

Argument 1: Mandatory Release Under IRC § 6325(a)

The IRS is required by statute to issue a Certificate of Release within 30 days of the date on which the qualifying condition is met. This is not discretionary — the statute uses the word "shall." Failure to comply may result in liability for damages under IRC § 7432.

Argument 2: Withdrawal Facilitates Collection

Withdrawal of the NFTL will facilitate collection because the lien's presence on the taxpayer's credit report impairs the taxpayer's ability to maintain employment / obtain housing / conduct business operations, which in turn reduces the taxpayer's ability to make installment payments. Removing the NFTL will allow the taxpayer to [________________________________], thereby improving the taxpayer's financial position and ability to satisfy the tax liability.

Argument 3: Premature or Procedurally Defective Filing

The NFTL was filed prematurely or not in accordance with IRS administrative procedures because [________________________________]. Under IRC § 6323(j)(1)(A) and IRM 5.12.9.3.1.1, the IRS should withdraw a notice that was filed before the taxpayer was given a Collection Due Process (CDP) hearing or before proper notice and demand.

Argument 4: Installment Agreement Compliance

The taxpayer has entered into an installment agreement under IRC § 6159, has made all required payments, and has filed all required returns. Under IRM 5.12.9.3.1, the NFTL should be withdrawn when the taxpayer is in compliance with a direct debit installment agreement and the balance is $50,000 or less.

Argument 5: Taxpayer Bill of Rights

Under IRC § 7803(a)(3), the taxpayer has the right to privacy, the right to a fair and just tax system, and the right to finality. Continuing to maintain an NFTL when the conditions for release or withdrawal have been met violates these rights.

Argument 6: IRC § 7432 — Damages for Failure to Release Lien

If the IRS knowingly or negligently fails to release a lien within 30 days as required by IRC § 6325(a), the taxpayer may bring a civil action for damages under IRC § 7432. Damages include the actual, direct economic damages sustained plus the costs of the action. This letter serves as formal notice of the taxpayer's right to pursue such damages if the lien is not timely released.

VIII. APPEAL RIGHTS

If this request is denied, the taxpayer has the following appeal rights:

A. Collection Due Process Hearing (IRC § 6320)

Within 30 days of receiving the first Notice of Federal Tax Lien filing in a collection period, the taxpayer may request a CDP hearing by filing Form 12153. At the hearing, the taxpayer may:
- Challenge the appropriateness of the NFTL filing
- Propose collection alternatives (installment agreement, offer in compromise, CNC status)
- Request withdrawal of the NFTL
- Challenge the underlying liability (if not previously contested)

B. Collection Appeals Program (CAP)

The taxpayer may use the CAP to appeal a denied lien withdrawal or discharge request. CAP provides an expedited review through the IRS Independent Office of Appeals.

C. Taxpayer Advocate Service

If the lien is causing significant hardship and normal channels have been exhausted, the taxpayer may contact the Taxpayer Advocate Service (TAS) by filing Form 911 (Request for Taxpayer Advocate Service Assistance).

D. Federal Court Action

• IRC § 7432 (damages for failure to release lien)
• 28 U.S.C. § 2410 (quiet title action involving the United States)

IX. PRACTICE TIPS FOR PRACTITIONERS

A. Release vs. Withdrawal — Choosing the Right Relief

1. Release: Seek a release when the liability has been paid in full, the CSED has expired, or a bond has been accepted. A release extinguishes both the lien and the NFTL.
2. Withdrawal: Seek a withdrawal when the underlying liability still exists but the NFTL should be removed from public record (e.g., taxpayer is in an installment agreement). The statutory lien remains.
3. Discharge: Seek a discharge when the taxpayer needs to sell or refinance specific property. The lien is removed from that property only.
4. Subordination: Seek subordination when a third-party lender requires priority. The IRS lien remains but moves behind the new lender's interest.

B. Processing Times

• Lien releases: IRS must act within 30 days of the qualifying event
• Lien withdrawals: Typically 30–60 days after submission of Form 12277
• Discharges: Typically 45–90 days; expedited processing available for imminent closings
• Subordinations: Similar to discharges; allow adequate lead time before the transaction

C. Key IRS Forms and Publications

D. Centralized Lien Operation Contact

For lien-related inquiries, contact the IRS Centralized Lien Operation:
- Phone: (800) 913-6050
- Fax: (855) 390-3530
- Address varies by state — consult Publication 4235

X. CONCLUSION

For the reasons stated above, I respectfully request that the Internal Revenue Service issue a [Certificate of Release / Withdrawal Notice / Certificate of Discharge / Certificate of Subordination] of the Notice of Federal Tax Lien described above. The conditions for [release under IRC § 6325(a) / withdrawal under IRC § 6323(j) / discharge under IRC § 6325(b) / subordination under IRC § 6325(d)] have been satisfied, and continued maintenance of the lien [serves no collection purpose / impairs the taxpayer's ability to satisfy the liability / is not in accordance with administrative procedures].

Please confirm receipt of this request and advise of any additional information or documentation required. If you require further information, I may be reached at the address and phone number listed above.

Thank you for your prompt attention to this matter.

Respectfully submitted,

________________________________________
[TAXPAYER NAME]
[________________________________]
[________________________________]
[________________________________]
Telephone: [________________________________]
E-mail: [________________________________]

Authorized Representative (if applicable):

________________________________________
[REPRESENTATIVE NAME]
[TITLE / DESIGNATION (Attorney, CPA, Enrolled Agent)]
[FIRM NAME]
[________________________________]
[________________________________]
Telephone: [________________________________]
E-mail: [________________________________]
CAF Number: [________________________________]

Enclosures

[List all enclosed documents]

1. [________________________________]
2. [________________________________]
3. [________________________________]
4. [________________________________]
5. [________________________________]

Sources and References

• IRC § 6321 — Lien for Taxes: https://www.law.cornell.edu/uscode/text/26/6321
• IRC § 6323(j) — Withdrawal of NFTL: https://www.law.cornell.edu/uscode/text/26/6323
• IRC § 6325 — Release of Lien or Discharge of Property: https://www.law.cornell.edu/uscode/text/26/6325
• IRM 5.12.3 — Lien Release and Related Topics: https://www.irs.gov/irm/part5/irm_05-012-003r
• IRM 5.12.9 — Withdrawal of NFTL: https://www.irs.gov/irm/part5/irm_05-012-009
• IRM 5.12.10 — Lien Related Certificates: https://www.irs.gov/irm/part5/irm_05-012-010
• Form 12277 (Application for Withdrawal): https://www.irs.gov/pub/irs-pdf/f12277.pdf
• Understanding a Federal Tax Lien: https://www.irs.gov/businesses/small-businesses-self-employed/understanding-a-federal-tax-lien
• Publication 4235 — Collection Advisory Group Addresses: https://www.irs.gov/pub/irs-pdf/p4235.pdf
• Taxpayer Bill of Rights: https://www.irs.gov/taxpayer-bill-of-rights