What Letter 3172 means
The full title is Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. The IRS sends it within five business days after filing the lien, along with a copy of the lien itself, Form 668(Y)(c). The enclosure lists each tax type and period, the assessment dates, and the unpaid balances the lien covers.
Lien vs. levy
| Lien | Levy | |
|---|---|---|
| What it is | A legal claim against your property that secures the debt | The actual taking of property, such as wages or bank funds |
| Is money taken? | No | Yes |
| Public record? | Yes, once the notice is filed | Not as a public filing |
How a lien affects you
- Property sales and refinancing. The lien attaches to real estate, vehicles and other assets, so title companies and lenders will usually require it to be paid, discharged or subordinated before a sale or refinance closes.
- Business assets. It also attaches to business property and receivables, which can affect financing.
- Credit reports. The major credit bureaus stopped including tax liens in consumer credit reports in 2018, but liens remain in public records that lenders can still find.
Your hearing deadline
You can request a Collection Due Process hearing about the lien on Form 12153 by the deadline in the letter, which runs about 30 days. At the hearing you can challenge whether the lien filing was appropriate, propose a payment plan or other resolution, and ask for the lien to be withdrawn, discharged or subordinated. If you miss the deadline, you may still request an equivalent hearing within one year plus five business days of the lien filing date, but you generally lose the right to go to Tax Court.
Ways to remove or limit a lien
Release
The IRS releases the lien within 30 days after the balance is paid in full or becomes legally unenforceable.
Withdrawal (Form 12277)
Removes the public notice as if it had never been filed. One common route: owe $25,000 or less, convert a payment plan to direct debit, and make several on-time payments. Withdrawal is also possible when the filing was premature or didn't follow IRS procedures.
Discharge (Form 14135)
Removes the lien from a specific piece of property, often so a sale can close.
Subordination (Form 14134)
Lets another creditor, such as a refinance lender, move ahead of the IRS, often because the refinance helps you pay the tax.
See all resolution options.
Work with a tax resolution firm like ours
A lien affects your property and your ability to borrow, and the hearing deadline in this letter is short. A firm can request the hearing and work toward getting the lien withdrawn, discharged or subordinated.
What we handle for you:
- Request a Collection Due Process hearing before the deadline, if needed
- Set up a resolution that can qualify you for lien withdrawal
- Handle discharge or subordination requests when a sale or refinance is pending
Your consultation is free, your fee is quoted in writing before any work starts, and if you don't need us, we'll tell you.
Questions about the Letter 3172
What is IRS Letter 3172?
It's the Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. It tells you the IRS has filed a lien in the public record and explains your right to appeal that filing.
How long do I have to respond to Letter 3172?
You can request a Collection Due Process hearing by the deadline shown in the letter, which is about 30 days. After that, an equivalent hearing may still be available within one year plus five business days of the lien filing date.
Does a tax lien show up on my credit report?
The major credit bureaus stopped including tax liens in consumer credit reports in 2018. The lien is still a public record that lenders, title companies and others can find.
How do I get a federal tax lien removed?
It's released within 30 days after the balance is paid in full. It may be withdrawn earlier, for example after setting up a qualifying direct debit payment plan on a balance of $25,000 or less. Discharge and subordination can help with a specific sale or refinance.
Is a lien the same as a levy?
No. A lien is a claim that secures the debt. A levy is the actual seizure of property, such as wages or bank funds.