A federal tax lien is a claim by the Internal Revenue Service (IRS) against your property. In filing a Notice of Federal Tax Lien, the government establishes its interest in your property as a creditor in competition with other creditors in certain situations, such as bankruptcy proceedings or sales of real estate. A tax lien will show and can affect your credit report negatively. Once a lien is filed, the IRS generally will not release the lien until the taxes, penalties, interest, and recording fees are paid in full or the IRS collect the tax.