Certificate of Discharge of Property from Federal Tax Lien (Publication 783) from the Internal Revenue Service.
During the course of my practice it is common that we will have to deal with a lien recorded on title from the Internal Review Service/ United States Treasury. Usually this is related to an outstanding tax liability that is owed by a homeowner. There is process that you will need to go thru in order to request that the IRS remove this lien. It requires that you to complete IRS form Number: 14135. This form is fairly simple. You will need to fill out your personal information of course along with the prospective buyers information. You will also need to provide the IRS with a full title exam showing all liens along with payoffs for said liens. Also the IRS will require some evidence of value. Often times we will use either the buyer's appraisal used for the purchase of the property, a Certified Market Analysis from the listing agent or a recent Tax Evaluation from the city or town where the property is located. It is our job to show the IRS that there is no equity in the property to pay this lien. This is assuming the transaction is a short sale. Also the IRS will want a copy of the final Closing Disclosure signed by all parties.
Once the IRS has reviewed all these documents; they will decide if a Certificate of Discharge of Property from Federal Tax Lien (Publication 783)is appropriate given the financial transaction and approval requested by the taxpayer.
Often times if the closing is a short sale, the forms are completed appropriately and all documents are provided it is highly likely that the Certificate of Discharge of Property from Federal Tax Lien (Publication 783) will be approved for zero dollars.
Of course one thing to consider is that the lien is removed only. The underlying tax liability remains and is still collectible pursuant to normal collection procedures. This is a Lien Release Only.
Having an attorney handle this type of matter is extremely important to ensure a smooth transaction. I have personally handled many of these issues.
