I failed to file several years returns. So the irs filed for me with a substitute return. Then I had a tax lien filed on me. If I go back a file returns for the years that were substitute returns, it will surely lower the amount of taxes I owe. What happens to the lien? Can they change the amount of the lien? Or what happens because the lien would now be an incorrect amount.
The Federal Tax Lien (FTL) comes into existence when you incur and fail to pay a tax liability. At that point, only you and the government are aware of the lien. The document that is filed is a Notice of Federal Tax Lien (NFTL), which gives public notice of the existence of the lien in order to establish the government's priority against third parties. The amount shown on the NFTL is the balance of assessed tax, penalty, and interest at the time the NFTL is filed. The amount of the FTL will increase with accrual of penalty and interest, and will decrease with payments, credits, and downward adjustments. The chance that the amount shown on the NFTL will ever equal the true (payoff) amount of the FTL is just about nil. The IRS won't file a new NFTL just to reflect a lesser amount when/if your assessment is reduced. They will file a release of lien when you pay all associated tax, penalty, interest, and fees.
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