Once your tax lien is fully paid off, you must still ask the IRS to withdraw the lien. The IRS will withdraw the lien immediately if the lien is paid in full and you have been tax compliant for the past three years. The cool thing about the removal of the lien is it is as if the lien had never been filed. The lien does not show up on any credit report pulled after the lien removal date.
You can ask for a lien withdrawal even if you haven’t fully repaid the debt if you owe the IRS less than $25k and you agree to pay off the remainder of the debt by monthly bank debits.
Use Form 12277 to request a lien removal.