REFINANCING WITH A LIEN
Before reading this page make sure you understand what triggers a federal tax lien and how to stop it.
If you're a property owner you will have many obligations to fulfill, especially if there is Notice of Federal Tax Lien filed against you.
There are 2 different situations where you can either sell or refinance your home in order to satisfy the amount owed to the IRS as follows:
satisfy the amount owed to the IRS as follows:
- SELLING YOUR PROPERTY
- If you are selling your property to satisfy your taxes due, you must apply for a discharge. A discharge means the IRS removes the lien from your property so that it may transfer to the new owner free of the lien.
- Use Form 14135. (see attached form) https://www.irs.gov/pub/irs-pdf/f14135.pdf
- Attach a copy of your sales contract. If you don’t have it available when you’re preparing the Form 14135, you must explain how the property ownership will transfer to the new homeowner. Submit copies of the sales contract/purchase agreement. If you don’t have copies of the sales contract/purchase agreement you can explain on form 14135 item 10 and describe how and when the taxpayer will be disposed of their interest in the property.
- REFINANCING YOUR HOME
- If you are refinancing to get a loan to payoff your tax debt, then you must apply for subordination. Subordination means the IRS gives another creditor the right to be paid before the tax lien is paid.
- Use Form 14134 (see attached). https://www.irs.gov/pub/irs-pdf/f14134.pdf
- If refinancing your current mortgage and it will not provide money for your tax debt, but you can document that it will benefit both you and the IRS, you must include a separate signed and dated piece of paper explaining how the loan will help pay your IRS debt.
If the forms above are not available, you can submit a typewritten letter to:
Internal Revenue Service
Advisory Estate Tax Lien
Group 55 South Market St.
Mail Stop 5350
San Jose, CA 95113-2324
Attn: Group Manager E-fax number: 877-477-9243
E Fax number: 877-477-9243
Assistance with completing the form is available by calling the 1-800-829-1040.