What Is Letter 3172?

Letter 3172 is the IRS's notification that a Notice of Federal Tax Lien (NFTL) has been filed in public records against you. It is titled "Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320."

The lien has already been filed at the county courthouse or state recording office at the time you receive this letter. The letter provides formal notification and informs you of your right to request a Collection Due Process (CDP) Hearing regarding the lien filing.

What Is a Federal Tax Lien?

A federal tax lien is the IRS's legal claim against all of your current and future property — real estate, vehicles, financial accounts, business assets — until your tax debt is fully paid or the lien is otherwise released.

The lien does not mean the IRS is taking your property. It means the government has a legal interest in your property that must be satisfied before you can sell it, refinance it, or transfer it free and clear.

Why Did the IRS File a Lien?

The IRS files a Notice of Federal Tax Lien when:

  • Your balance exceeds $10,000 (the threshold raised under Fresh Start from $5,000)
  • You have not paid the balance despite receiving prior notices
  • The IRS wants to protect its legal interest in your assets, particularly before you could sell or encumber property

The IRS may also file a lien when it believes a taxpayer is attempting to hide, transfer, or shield assets from collection.

Impact of a Federal Tax Lien

Real estate: A lien attaches to all real property in the county where the lien is filed. If you try to sell or refinance, the title company will find the lien. The lien must be satisfied before the title can transfer free and clear.

Credit: Major credit bureaus stopped including tax liens in credit reports in 2017–2018. However, lenders, landlords, and employers who run public record searches may still find the lien.

Business financing: Banks and lenders frequently search for tax liens before extending credit.

Business assets: If you own a business, the lien can attach to receivables, equipment, and other business property.

Your 30-Day Right to a Hearing

Letter 3172 gives you 30 days from the date of the letter to request a Collection Due Process Hearing regarding the lien filing. File Form 12153 with the IRS Office of Appeals.

In a CDP Hearing regarding a lien, you can:

  • Challenge the appropriateness of the lien filing
  • Dispute the underlying tax liability if you never had a prior opportunity
  • Request alternative collection arrangements (installment agreement, OIC)
  • Request lien withdrawal if you can show it is in the best interest of the government and taxpayer

How to Get the Lien Removed

Pay the Debt in Full: The IRS must release the lien within 30 days of full payment.

Lien Withdrawal Under Fresh Start: If your balance is under $25,000 and you are on a Direct Debit Installment Agreement, you may request withdrawal by filing Form 12277 after 3 consecutive on-time payments.

Lien Subordination: Allows another creditor to take priority over the IRS on a specific asset — useful for enabling a mortgage refinance or new loan.

Lien Discharge: Removes the lien from a specific piece of property to allow a sale to proceed.

Offer in Compromise: If an OIC is accepted, the lien is released once the agreed settlement amount is paid.

Collection Statute Expiration: After the 10-year collection statute expires, the IRS must release the lien within 30 days.

Notifying Credit Bureaus

If you obtain a lien withdrawal or release and it is still appearing in any records, contact the county recorder's office where the original lien was filed to confirm the withdrawal has been recorded. Then contact any affected lenders or credit bureaus with documentation.