notice of tax lien
A notice of tax lien is a public filing made by a tax authority, most often the Internal Revenue Service (IRS), to inform creditors that the government has a legal claim against a taxpayer’s property for unpaid taxes.
In the federal context, the IRS issues a Notice of Federal Tax Lien (NFTL) after assessing a tax liability, sending a Notice and Demand for Payment, and the taxpayer’s failure to pay in full. The lien attaches to all current and future property and rights to property, including real estate, personal property, and financial assets. Once filed, the notice becomes part of the public record and may appear on the taxpayer’s credit report, negatively affecting creditworthiness. A taxpayer may request withdrawal of a federal tax lien if it was filed in error or if the taxpayer enters into an installment agreement to resolve the liability. The IRS must release the lien within 30 days after the underlying tax debt is paid in full.
State tax agencies follow similar procedures. For example, California’s Franchise Tax Board may record a Notice of State Tax Lien when a taxpayer fails to satisfy an assessed tax after notice and demand. The lien may be recorded with county recorders for real property such as homes, land, or buildings, or filed with the Secretary of State for personal property, including business equipment, vehicles, or mobile homes. The notice informs creditors of the state’s claim and secures the government’s priority in collecting the debt.
[Last reviewed in October of 2025 by the Wex Definitions Team]
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