Discharging Property from a Federal Tax Lien: How to Apply for a Certificate of Discharge

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The federal tax lien is — to the surprise of many unsuspecting taxpayers — one of the most devastating actions the IRS can take during collections but can be dealt with by filing for a Certificate of Discharge application. It may not result in any immediate financial losses, but it can prompt even greater problems, such as complications with your credit score or selling property.

As overwhelming as it can be to deal with a federal tax lien, hope exists in the form of the Certificate of Discharge. This option allows you to remove a lien so that it no longer impacts a particular piece of property. If successful, you may be able to sell or refinance the property in question. Keep reading to learn how you can apply:

Information to Include in Your Application

When you apply for the Certificate of Discharge, you’ll need to enter the name and Social Security Number (or Employer Identification Number) that appeared on the lien. Your application should also include basic contact information, whether you are the owner of the property in question, and which title or escrow company will be involved with a potential settlement.

Requested monetary information may include the proposed amount of the property sale, plus any proceeds expected by the IRS “for application to the tax liability.”

Property Descriptions, Appraisals, and Valuations

From physical addresses to serial numbers, a variety of details can be entered to let the IRS know the nature of the property in question. If possible, attach a copy of the deed or title to the application.

Prior to applying, you’ll need to complete an appraisal via a “disinterested third party.” Other forms of property value verification will need to be included with your application.

However, regardless of the details above,  you’ll need an expert to apply for the Certificate of Discharge on your behalf. Please feel free to request help from Highland Tax Group. Contact us today to get started.