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Reviewed August 5, 2026

Notice of Federal Tax Lien (NFTL)

A Notice of Federal Tax Lien is the public document the IRS files to alert other creditors that the federal government has a legal claim against a taxpayer’s property for unpaid federal tax.

What the term means

The federal tax lien arises by law after tax is assessed, the IRS demands payment, and the liability is not paid. The Notice of Federal Tax Lien, commonly abbreviated NFTL, is Form 668(Y) or its electronic equivalent filed in a public recording office. It establishes notice and helps determine the government's priority against competing creditors.

The lien and the notice are not identical

The statutory lien can exist before the IRS files an NFTL. Withdrawing the notice removes the public filing and its effect against creditors, but an unpaid tax lien can remain. Releasing the lien extinguishes the lien after the legal conditions for release are met.

Withdrawal, release, discharge, and subordination

  • Withdrawal: removes the filed notice from the public record; Form 12277 is the usual request.
  • Release: extinguishes the federal tax lien after payment, an accepted offer is satisfied, a bond guarantees payment, or the collection period ends.
  • Discharge: removes specific property from the lien while the lien may continue against other property.
  • Subordination: allows another creditor to move ahead of the IRS for a specific transaction without removing the lien.

An NFTL is not a levy

The NFTL gives public notice of a claim. A levy actually seizes property or rights to property, such as funds in an account or certain income. A taxpayer may have separate appeal rights for the filing of the notice and for a proposed or completed levy.

Public record and credit reports

The IRS files NFTLs with recording offices designated under state law. The major consumer credit bureaus stopped including tax liens on personal credit reports in 2018, but the NFTL remains public and can still affect lending, property transactions, business relationships, and creditor priority.

Practical example

The IRS files an NFTL for unpaid individual income tax. The taxpayer later enters a qualifying Direct Debit Installment Agreement and meets the general Fresh Start conditions. The taxpayer submits Form 12277. If the IRS approves it, the public notice is withdrawn, but the taxpayer must continue paying the agreement until the debt is resolved.

Official sources

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