If the IRS has filed a public Notice of Federal Tax Lien (NFTL) against you because of unpaid taxes, Form 12277 offers a pathway to remove that lien from public records—even while you still owe the debt. This guide breaks down everything you need to know about using Form 12277 in plain English.

What the Form Is For

Form 12277, officially titled “Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien,” is your tool for requesting that the IRS remove a tax lien from public record.

A tax lien is the government’s legal claim on your property when you don’t pay your taxes. The Notice of Federal Tax Lien (NFTL) is the public document the IRS files to alert creditors about this claim.

A withdrawal is different from a release:

• Release: You’ve paid your debt in full, and the IRS no longer has a claim.
• Withdrawal: The public notice is removed, but you still owe the money.

Think of it as the IRS saying:

“We’re taking down the public billboard about your debt, but you still need to pay us back.”

Why would the IRS do this? Because sometimes removing the lien helps them collect the debt—for example, if you need a car loan to keep a job that allows you to pay the IRS back.
IRS.gov

When You’d Use This Form (and When You Wouldn’t)

You would file Form 12277 when a Notice of Federal Tax Lien has already been filed against you and you meet specific qualifying conditions. There’s no deadline for filing—you can request a withdrawal at any time.

When to File

File Form 12277 if:

• You have a Direct Debit Installment Agreement ($25,000 or less, with three consecutive automatic payments).
• The lien was filed prematurely or incorrectly (e.g., during bankruptcy or without proper notice).
• Withdrawal helps the IRS collect (for example, enabling you to refinance or maintain employment).
• It’s in everyone’s best interest—both you and the IRS agree withdrawal serves both parties.

When Not to File

Do not file Form 12277 if:

• You’ve already paid your debt in full (the IRS should release the lien automatically within 30 days).
• You simply dislike having a lien; you must meet one of the legal conditions under IRC §6323(j).

Taxpayer Advocate Service

Key Rules You Need to Know

Withdrawal Is Discretionary

Even if you qualify, the IRS doesn’t have to approve your request (except for liens filed during bankruptcy). Approval depends on whether withdrawal helps tax collection or compliance.

You Still Owe the Debt

Withdrawal removes the public notice—but not the debt itself. If you default later, the IRS can refile the lien.

Current Compliance Matters

You must be current on all filings and payments. The IRS rarely grants withdrawal to taxpayers with new or ongoing noncompliance.

Management Approval Required

Per IRS Delegation Order 5-4, most withdrawals require management review and approval.

Third-Party Notification

If approved, the IRS can send withdrawal notices to creditors or lenders you list on the form—helping you move forward with loans or refinancing.

One Chance Per Module

If you already received a withdrawal for a given tax module under a Direct Debit Installment Agreement, you can’t request another (unless it was withdrawn for improper filing).

IRS.gov

Step-by-Step: How to Complete Form 12277

Step 1: Gather Your Information

Collect:

• Your Notice of Federal Tax Lien (Form 668-Y)
• Lien serial number, filing date, and recording location
• Tax periods and amounts covered

Step 2: Identify Your Qualifying Reason

Choose one of the four qualifying conditions:

1. The lien was filed prematurely or in error.
2. You have a Direct Debit Installment Agreement.
3. Withdrawal will facilitate collection.
4. Best interest for both you and the IRS.

Your written explanation should clearly describe which applies and why.

Step 3: Complete All Sections Thoroughly

Provide:

• Full taxpayer ID details
• Clear explanation and justification
• All supporting documentation (e.g., payment records, employer letters, loan denials)

Step 4: List Creditors to Notify

Add any banks or lenders you want notified after approval, including full mailing addresses.

Step 5: Submit to the Correct IRS Office

Send your form to the IRS Collection Advisory Group for your area, or contact:

Centralized Lien Operation: 800-913-6050
Fax: 855-390-3530

Step 6: Keep Copies

Keep copies of everything submitted, including confirmations and proof of mailing.

💡 While written requests are accepted, using the official Form 12277 ensures you include all necessary information.
IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Incomplete Applications

Always complete all fields. Use “N/A” if not applicable and attach all supporting documentation.

Mistake #2: Failing to Prove Your Qualifying Reason

Don’t just claim eligibility—prove it. Include documentation such as payment history, lender statements, or installment agreements.

Mistake #3: Noncompliance with Current Tax Obligations

Unfiled returns or new debts will cause denial. File all returns and stay current before applying.

Mistake #4: Requesting Withdrawal Instead of Subordination

Sometimes, you only need a lien to take lower priority (subordination) instead of being withdrawn.
If that solves your issue, use Form 14134 (Application for Certificate of Subordination) instead.

Mistake #5: Not Following Up

Contact the IRS within 30 days if you haven’t received confirmation.

Mistake #6: Ignoring Appeal Rights

If denied, you can appeal within 30 days using Form 9423 (Collection Appeal Request).
Taxpayer Advocate Service

What Happens After You File

Initial Processing

IRS reviews your form for completeness (30–45 days typical). Missing data causes delays.

Review and Decision

IRS staff evaluates eligibility and public interest in withdrawal. They may request more info before deciding.

Notification of Decision

If approved:

• You’ll receive Form 10916 (Withdrawal of Filed Notice of Federal Tax Lien).
• The IRS files this withdrawal in the same public records office as the original lien.
• Copies go to any creditors you listed.

If denied:

• You’ll receive a letter explaining the reason and appeal rights (30 days to appeal via Form 9423).

After Approval

The lien is removed from public record, but you still owe the debt. Continue making payments—if you default, the IRS can refile.

Impact on Credit

Since 2018, tax liens no longer appear on credit reports, but lenders can still find them through public searches.
A withdrawal removes that record and may improve your lending prospects.
IRS.gov

FAQs

What’s the difference between release, discharge, subordination, and withdrawal?

• Release: You paid the debt; IRS removes its claim entirely.
• Discharge: The lien is removed from one property but remains on others.
• Subordination: Another creditor moves ahead in priority.
• Withdrawal: The public notice is removed, but you still owe the debt.

Can I get a lien withdrawn if I haven’t paid anything?

Possibly. You may qualify under:

• A Direct Debit Installment Agreement (after three successful payments).
• A lien filed in error.
• A case where withdrawal helps the IRS collect.

How long does the process take?

Typically 30–60 days for complete applications, longer for complex cases.
Check status at 800-913-6050 or through your assigned IRS office.

Will withdrawing the lien affect an Offer in Compromise?

Coordinate timing carefully. Withdrawal before an Offer in Compromise is accepted may complicate processing—consult your tax professional first.

Can I request withdrawal after a lien has been released?

Yes. You can apply after full payment if you meet compliance requirements for the past three years, using Form 10916-A.

What if I have multiple liens?

You may need separate Form 12277s for each lien unless they share a serial number or cover the same NFTL.

Do I need a tax professional?

Not required—but highly recommended. Tax attorneys, CPAs, or enrolled agents can identify your best qualifying grounds and help build a persuasive case.
Low-income taxpayers can also contact the Taxpayer Advocate Service (877-777-4778) for free help.

Key Takeaway

Form 12277 gives taxpayers a legitimate way to remove a federal tax lien from public record—but it’s not automatic.
Approval depends on meeting specific criteria, staying compliant, and submitting a well-documented, complete application.

If you’re unsure which strategy is right for your situation, consider consulting a qualified tax professional or contacting the Taxpayer Advocate Service for assistance.