Updated October 2025
If you owe taxes and want to stop the IRS from filing a tax lien on your property, don’t procrastinate in taking action. You can take several proactive steps to avoid a federal tax lien entirely, even if you can’t pay your tax bill in full right away.
Key Takeaways
- To prevent an IRS tax lien, proactively reach out to the agency.
- The IRS is less likely to file a lien if you establish a payment plan or qualify for temporary hardship options.
- Liens typically result from inaction, not just an inability to pay.
Keep reading to learn what options you have to prevent the IRS from taking collection action and putting a tax lien on your property.
| Action | Will it prevent a lien? | Notes |
|---|---|---|
| File and pay on time | Yes | Most reliable way to avoid a lien |
| Request a short-term extension | Yes | Get 180 days to pay up to $100,000 in tax debt |
| Set up an installment plan | Often yes | Can avoid liens, especially if tax debt is under $50,000 and your repayment plan is set to auto-debit |
| Ignore a notice from the IRS | No | Avoidance increases the risk that the IRS will file a lien |
| Show financial hardship | Possibly | If you get on CNC status, the IRS may not file a tax lien, but once a lien is filed, CNC status won’t get the lien removed |
1. File and Pay Taxes on Time – Or Set Up Monthly Payments
The easiest way to avoid a federal tax lien is to pay your taxes on time and in full. If you cannot afford a lump sum payment, the IRS offers payment plans or installment agreements. These agreements give you more time to pay your tax bill. You’re still responsible for your debt.
If you owe less than $50,000 in taxes, interest, and penalties, you may qualify for a Simple Payment Plan. This long-term payment plan allows you to make payments over 120 months (10 years). In exchange, the IRS will not file a public notice of a federal tax lien (as long as you set up payments before they file the lien).
2. Understand When the IRS May File a Lien
It’s easier to avoid a lien if you know when the IRS is likely to file one. The IRS may file a notice of federal tax lien if:
- The IRS assesses your tax liability (officially records the balance due).
- The IRS sends you a bill or “Notice and Demand for Payment.”
- You ignore the bill or refuse to pay the debt in time.
While not a strict rule, the IRS generally avoids filing a tax lien when unpaid tax debt is below $10,000. However, the IRS retains the authority to file a lien for lower amounts if it deems it necessary to preserve the government’s financial interest.
The IRS may consider filing a lien if an unpaid tax debt exceeds $10,000. If a debt exceeds $50,000 (or it’s a high-risk case, like an asset transfer, or there’s a record of repeat noncompliance), the likelihood of the IRS filing a lien increases significantly. However, in all cases, the best way to avoid a lien is to contact the agency proactively. Read more about what you need to know about tax liens.
3. Communicate with the IRS Early
Don’t wait. As soon as you receive a notice from the IRS, take action. While notices can be very unsettling, ignoring them does not make the problem disappear – it just exacerbates the situation, leading to more severe penalties and enforcement actions. The IRS is more likely to work constructively with taxpayers who demonstrate good-faith efforts to resolve their tax issues proactively.
Responding to a notice shows your willingness to resolve the matter, which can open the door to options such as payment plans and temporary hardship solutions. If you don’t respond, the IRS may interpret your procrastination as non-compliance and initiate more aggressive collection attempts, like garnishing your wages or placing a tax lien on your property.
4. Stay Current on Your Tax Returns to Avoid Future Action
Once you enter into an installment agreement, you must file future returns and make payments on time. Failure to do so may result in the IRS taking action to file a lien if new debts arise or you default on a previous agreement.
5. Apply for Penalty Abatement
Although penalty abatement will not directly help you avoid a tax lien, it can help to reduce the amount you owe, which may indirectly help you avoid a tax lien. The IRS’s First Time Abatement program provides relief for taxpayers facing penalties and a potential lien on their income or property. This program removes certain late-payment or late-filing penalties for individuals, businesses, and employers with a clean compliance history.
A person or entity can apply for a First Time Abatement if they:
- Did not have any penalties on the three previous years’ tax returns,
- Filed all required returns or an extension, and
- Have paid or arranged to pay any taxes due.
You can apply by calling the IRS, writing a letter, or filing Form 843.
6. Look Into an Offer In Compromise
If the IRS accepts a settlement (aka an “offer in compromise”) on your tax liability, it won’t file a tax lien against you. And if one has already been filed, they will release it once you pay the tax liability.
An Offer in Compromise (OIC) is an agreement between you and the IRS that settles your tax liabilities for less than the full amount owed. Taxpayers generally do not qualify for an OIC if they can pay their tax liabilities in full through an installment agreement or by other means – you can only qualify if you can’t afford to pay in full or make payments, or if there is a legitimate doubt that you owe the tax liability.
You can use the IRS Offer in Compromise Pre-Qualifier calculator to determine your eligibility for the program.
7. Write a Letter of Appeal
You may be able to avoid a federal tax lien by filing a letter of appeal with the IRS, explaining how the lien isn’t in the government’s best interests. You have three options, each handled by the IRS Office of Appeals:
- Collection due process hearing (CDP), which you can request within 30 days after an NFTL is issued. Complete IRS Form 12153, “Request for a Collection Due Process or Equivalent Hearing,” or send a written letter with the same required information, plus a copy of the lien notice.
- Equivalent hearing, which you can request if you miss the 30-day deadline for a CDP hearing. You have up to one year after the NFTL is issued to request this hearing.
- Collection Appeals Program (CAP), which you can try when a lien is pending or in process, or after the IRS has denied a request to subordinate, discharge, or withdraw a lien.
Most “hearings” are relatively informal and typically happen over the phone. You’ll be able to explain how the lien may affect you financially and discuss resolution options such as payment plans.
Preventing Tax Liens FAQs
How can I prevent an IRS tax lien from being filed?
By setting up a payment plan if you owe less than $50,000 or requesting an extension as soon as you receive a notice of balance due. Don’t procrastinate.
Does the IRS file a lien for small amounts?
Usually not for balances under $10,000, if you’re cooperating and haven’t defaulted on previous payments.
Will an installment plan always prevent a lien?
In many cases, yes—especially if the agreement is approved quickly and you stay compliant (paying on time, not missing payments, filing future taxes on time). However, if you owe over $50,000, the IRS may file a tax lien even if you set up a monthly payment plan.
Can I prevent a lien if I can’t pay my tax debt right now?
You may qualify for temporary relief based on financial hardship, but communication is key. It’s your responsibility to prove that your financial hardship prevents you from making payments.
Can I get rid of a lien once it’s been filed?
If you can’t avoid a tax lien, you may have to deal with it after it’s filed. If you owe less than $25,000, set up payments to pay off the debt within five years, and are compliant with tax filing requirements, the IRS may remove the lien (aka withdraw) when you set up a qualifying payment plan and make three monthly payments. Otherwise, you may need to consider discharge or subordination.
Contact Wiggam Law: Tax Attorneys Atlanta, GA
Not sure what step to take? Talk to an experienced tax attorney about how to stop a tax lien before the IRS files it. If you are facing tax debts, whether it was your fault or someone else’s, please contact Wiggam Law, LLC for help with your case.
We’ve worked with individuals, businesses, officers, directors, shareholders, and partners in matters before the Internal Revenue Service, the Georgia Department of Revenue, and other state tax departments.
Our experienced Atlanta tax attorneys can help you choose the most effective strategy to resolve your tax issue and minimize your potential criminal exposure. Call (404) 233-9800 or contact us through our website.
