Tax Defense ✦ Liens
A Tax Lien Is a Cloud on Everything You Own. It Can Be Cleared.
A Notice of Federal Tax Lien recorded in your Colorado county attaches to your home, your business assets, and your credit. It doesn’t have to stay there. Withdrawal, discharge, subordination, and release each have their own rules, and North Star Law Firm uses the one that fits: for a sale, a refinance, a business loan, or simply to get your name off the public record.
Overview
What a lien does, and the four ways to deal with it
A federal tax lien arises automatically when a tax is assessed and unpaid. The Notice of Federal Tax Lien is the public filing that gives it priority against other creditors and makes it visible to lenders and title companies. Removing or working around the notice is a matter of matching the right IRS procedure to your goal. A release comes with full payment or expiration of the collection statute. A withdrawal erases the filing. A discharge frees one piece of property so it can be sold. A subordination lets a lender step ahead so a loan can close. Each is an application with financial and legal requirements, and each is faster with a representative who has filed them before.
- Lien withdrawal after a direct-debit installment agreement or improper filing
- Certificate of discharge for a Colorado home sale or property transfer
- Subordination for a refinance or business financing
- Release when the collection statute has expired
- CDP hearing under § 6320 within 30 days of the lien notice
- Colorado DOR lien resolution alongside the federal one
- Priority disputes with other creditors analyzed
- Lien avoidance in bankruptcy where the property is exempt
The Options
Matching the procedure to the goal
| Your goal | IRS procedure | Form | What it takes |
|---|---|---|---|
| Clear the public record and repair credit | Withdrawal (§ 6323(j)) | Form 12277 | Direct-debit installment agreement under $25,000, an improper filing, or a showing that withdrawal helps collection |
| Sell a house or other property | Discharge (§ 6325(b)) | Form 14135 | Appraisal, contract, and closing statement; IRS usually paid from proceeds |
| Refinance or borrow against property | Subordination (§ 6325(d)) | Form 14134 | Loan terms showing the IRS is better off (lower payment, cash to the IRS) |
| End the lien entirely | Release (§ 6325(a)) | Automatic | Full payment, accepted offer in compromise, or expiration of the 10-year collection statute |
The Attorney-CPA Difference
Lien applications are valuation exercises.
Every discharge and subordination application turns on numbers: the property’s value, the balances ahead of the IRS, the equity the IRS would receive, and the closing costs. We prepare those schedules ourselves, coordinate with the title company and lender on Colorado closings, and file the application with enough lead time that the transaction closes on schedule. For withdrawals, we structure the installment agreement to qualify first, then file.
- Equity and priority schedules prepared in-house
- Applications timed to Colorado closing dates
- Direct-debit agreements structured to unlock withdrawal
- Collection statute dates verified from the transcript
- Colorado DOR liens handled in the same matter
Questions & Answers
Federal Tax Liens questions, answered
Where does the IRS file a lien in Colorado?
A Notice of Federal Tax Lien against an individual is filed with the clerk and recorder of the county where you live, and against a business with the Colorado Secretary of State. Once filed it attaches to everything you own in that county, including a home, and it shows up in any title search.
Can I sell or refinance my house with a tax lien on it?
Yes, with the IRS’s cooperation. A certificate of discharge (Form 14135) releases the lien from the specific property being sold so the closing can proceed, usually with the IRS paid from the proceeds. A subordination (Form 14134) lets a refinance lender take priority. Both require an application with an appraisal and closing figures, and the timing has to be built into the transaction.
What is lien withdrawal, and when does it apply?
Withdrawal removes the notice from the public record as if it had not been filed. The IRS will withdraw a lien when it was filed prematurely or improperly, when you enter a direct-debit installment agreement and the balance is under $25,000, or when withdrawal helps collection. It is the outcome that repairs credit and clears title, and it should be requested whenever the facts support it.
Does the lien survive bankruptcy?
A lien filed before the bankruptcy attaches to the property you owned on the petition date and survives the discharge as to that property, even if your personal liability is discharged. Whether that matters depends on your equity and on what the IRS can practically collect. It is one of the reasons the order of operations between tax resolution and bankruptcy needs to be planned rather than improvised.
Does Colorado file its own liens?
Yes. The Department of Revenue records a notice of lien for assessed state tax with the county clerk and recorder, and it has the same practical effect on a title search. Colorado lien issues are usually resolved in the same payment plan or settlement that resolves the state balance.
Talk to an attorney-CPA before you talk to the IRS.
A free consultation, a plain-English assessment, and a flat fee in writing if you decide to move forward.