If you’ve received IRS Letter 3172, titled “Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC §6320,” the government has officially filed a public lien against your property. This is not just another notice — it’s a legal filing in county or state records that alerts creditors you owe the IRS money. It can affect your:
- Credit and lending ability
- Real estate transactions
- Business and personal reputation
Letter 3172 means the IRS has moved past simple collection notices (like CP504 or LT11) and has now recorded its legal claim against your property.
📘 Official IRS References: Understanding your IRS notice or letter
What IRS Letter 3172 Means?
Letter 3172 serves two simultaneous functions:
- It notifies you that the IRS has filed a Federal Tax Lien (NFTL).
- It informs you of your legal right to request a Collection Due Process (CDP) hearing within 30 days.
What a Federal Tax Lien Does?
A Federal Tax Lien (FTL) is the government’s legal claim against your property when you fail to pay a tax debt after demand. Once recorded, the lien attaches to:
- Financial assets (accounts, investments)
- Real estate (homes, land, buildings)
- Personal property (vehicles, equipment, inventory)
💡 Insight: The lien doesn’t seize your assets immediately — but it gives the IRS first legal priority over nearly all other creditors.
Why You Received Letter 3172?
Letter 3172 usually arrives after months of unpaid tax balance and prior IRS notices (CP14 → CP501 / CP503 → CP504 → LT11).
| Notice Type | Purpose |
|---|---|
| CP14 | Balance due |
| CP501 / CP503 | Reminder notices |
| CP504 | Intent to levy state refund |
| LT11 / 1058 | Final intent to levy wages and assets |
| ✅ Letter 3172 | Confirms the IRS has filed a Federal Tax Lien |
💡 Tip: Letter 3172 may arrive even while other collection actions are ongoing, including levy threats or wage garnishment.
Your Legal Rights Under Letter 3172
1️⃣ Right to a Collection Due Process (CDP) Hearing
You have 30 days from the date on Letter 3172 to file Form 12153 and request a CDP hearing. Benefits of filing:
- Stops IRS enforcement while the hearing is pending.
- Gives you a chance to challenge the lien’s validity or propose alternatives.
- Transfers the case to the IRS Office of Appeals — an independent review body.
💡 Insight: Filing Form 12153 is one of the few ways to pause collection activity while maintaining leverage to negotiate removal or subordination.
📘 Reference: Form 12153
2️⃣ Right to Challenge the Lien
You can challenge the lien if:
- You already paid the debt.
- The IRS failed to follow proper notice procedures.
- You were not legally liable for the tax.
- The lien was filed in error or duplicated.
3️⃣ Right to Representation
You can have a tax attorney or enrolled agent represent you before the IRS Appeals Office under Form 2848 (Power of Attorney).
How Long a Federal Tax Lien Lasts?
The lien lasts 10 years from the date of tax assessment — the same as the Collection Statute Expiration Date (CSED). The IRS, however, can refile the lien before expiration to extend its enforceability.
IRS Lien Actions — Release vs Withdrawal vs Discharge vs Subordination
| IRS Action | What It Does | When You Qualify | Effect on Public Record / Credit | IRS Form / Publication | Best For |
|---|---|---|---|---|---|
| Lien Release | Officially removes the lien after you’ve paid your tax debt in full or the collection period expires. | • Tax fully paid OR 10-year Collection Statute expired. • IRS issues Certificate of Release automatically within 30 days. | Public lien record remains but shows “Released.” Improves future creditworthiness. | IRS Lien Release Info | Taxpayers who have paid in full or whose lien has self-released. |
| Lien Withdrawal | Erases the lien’s public record as if it were never filed. | • Debt ≤ $25,000. • Enrolled in Direct Debit Installment Agreement. • 3 on-time payments made. • Or lien was filed in error. | Removes lien from county/public record; restores full credit visibility. | Form 12277 – Application for Withdrawal | Taxpayers who are paying under Fresh Start or need the lien erased from public record. |
| Discharge of Property | Removes the lien from a specific asset(e.g., to sell/refinance) while keeping it on other property. | • You sell/refinance property and pay IRS its share OR show no equity remains. • IRS approves via property-specific review. | Lien remains on other assets; discharged property becomes free to transfer. | Publication 783 – Instructions on Discharge | Taxpayers who need to sell or refinance a property under lien. |
| Subordination | Lets another creditor (like a mortgage lender) take priority over the IRS lien. | • You’re refinancing or borrowing to pay taxes. • IRS determines subordination increases likelihood of repayment. | Lien stays but lender’s interest moves ahead in priority; helps secure financing. | Publication 784 – Subordination of Federal Tax Lien | Taxpayers needing loan approval or refinance while lien remains. |
Why Legal Representation Matters for Letter 3172?
Legal representation for IRS Letter 3172 is crucial because the letter signifies the filing of a
Notice of Federal Tax Lien, a serious public record that impacts your assets and credit. A qualified representative can help navigate the complex appeals process, protect your rights, and negotiate a favorable resolution.
| Attorney Action | Outcome |
|---|---|
| File CDP appeal (Form 12153) | Stops enforcement; preserves Tax Court rights |
| Negotiate lien withdrawal or subordination | Protects credit and property |
| File OIC or Installment Agreement | Qualifies for lien release or withdrawal |
| Request lien discharge (Form 14135) | Allows sale without full payment |
| Monitor expiration; prevent refile | Lien expires naturally |
💡 Insight: Proper legal timing and filing often mean the difference between a lien that lasts 10 years and one that’s gone within months.
📘 Reference: Form 2848 – Power of Attorney
Letter 3172 Is Serious — But Manageable With Legal Help
An IRS Letter 3172 marks the IRS’s formal claim over your assets — but it’s also your best opportunity to stop long-term financial damage. By acting quickly, you can:
- File a CDP appeal and pause enforcement.
- Negotiate for withdrawal or subordination.
- Protect your credit, property, and business.
- Explore settlement or hardship programs that lead to full release.
Contact Pelham PLLC today for a confidential lien defense consultation. Our tax attorneys will:
- Review your IRS transcripts and lien filings.
- File timely appeals and negotiate removals.
- Protect your assets and credit from further harm.
- Develop a resolution strategy that restores financial stability.
Don’t let a public lien define your future — take control with experienced legal defense today.
FAQs
Is Letter 3172 a lien or a threat of one?
It’s confirmation that the IRS has already filed a lien — not just a warning.
Can a lien affect my credit score?
Yes. While credit bureaus no longer list liens, lenders and underwriters still check public record databases before approving credit.
Can I appeal the lien?
Yes — file Form 12153 within 30 days to request a Collection Due Process hearing.
What happens if I do nothing?
The lien remains until the debt is paid, settled, or the 10-year statute expires — blocking credit, loans, and real estate transactions.
