How to Prepare an Application for a Certificate of Discharge of Federal Tax Lien

How to Apply for a
Certificate of Discharge From Federal Tax Lien
A Certificate of Discharge under Internal Revenue Code Section
6325(b) removes the United States’ lien from the property
named in the certificate. Discharge of property under Internal
Revenue Code Section 6325(c) subject to an Estate Tax Lien is
not covered in this publication. For Estate Tax Lien discharges
see instead the application and instructions found in Form 4422
1. Complete Form 14135, Application for Certificate

of Discharge of Federal Tax Lien attached with this

publication.

2. Mail the completed Form 14135 and the appropriate

attachments to:

IRS Advisory Consolidated Receipts
7940 Kentucky Drive, Stop 2850F
Florence, KY 41042
(Refer to Publication 4235 Collection Advisory Group
Addresses for additional contact information.)
If you have any questions, contact the Advisory Consolidated
Receipts Office at 859-594-6090.
If you want to know how much you owe in order to pay the
lien(s) in full, call 1-800-913-6050, visit the nearest Taxpayer
Assistance Center, or contact the revenue officer assigned to
your case.
Important!
Please submit your application at least 45 days before the
transaction date that the certificate of discharge is needed.
Doing so will allow sufficient time for review, determination,
notification and the furnishing of any applicable documents by
the transaction date.

Information Required on the Application
Section 1 - Taxpayer Information
1. Enter the name and address of the individual(s) or business
as it appears on the Notice of Federal Tax Lien (NFTL). A
second name line is provided if needed.
2. Enter, if known, the last 4 digits of the social security
number (SSN) or full employer identification number as it
appears on the NFTL.
3. Enter, if known and if applicable, the last 4 digits of any
spousal SSN (secondary SSN) associated with the tax debt
listed on the NFTL.
4. Provide a daytime phone number and a fax number.
Section 2 - Applicant Information
1. Check the box on the first line of Section 2 if you are both
the taxpayer and the applicant. If you are not the taxpayer,
attach a copy of the lien.
2. If you have checked the box indicating that you are the
taxpayer and your information is the same as listed on the
lien, enter “same as taxpayer” on the name line.
3. If you are not the taxpayer or you are the taxpayer but your
information is no longer the same as the information on the
Notice of Federal Tax Lien, enter your name (include any
name changes), current address, daytime phone number
and fax number.

4. If you are not the taxpayer, enter in the box next to “Name”
your relationship to the taxpayer (e.g. parent, uncle, sister,
no relation, etc).
Section 3 - Purchaser/Transferee/New Owner
1. Check the box on the first line of Section 3 if you are both
the property owner and the applicant.
2. Enter the name of the property owner. Or enter “NA” if you
have checked the box indicating you are both the applicant
and the property owner, enter, “same as applicant”.
3. Enter the property owner’s relationship to the taxpayer (e.g.
taxpayer, parent, no relation, etc.).
Section 4 - Attorney/Representative Information
This section is used to list the taxpayer’s representative or a
representative of a party other than the taxpayer, such as the
lender, needing to receive information from the IRS. However,
you do not need a representative to request discharge of the
federal tax lien.
1. Check the box on the first line of Section 4 if you are
attaching a Form 8821 (Tax Information Authority) or Form
2848 (Power of Attorney) with your application. If you
are attaching one of these forms, please make sure it is
completely filled out, signed, and dated. You must provide
one of these forms if the representative represents an
interest other than the taxpayer.
2. Enter the name, address, phone number, and fax number
of your representative in this action. The IRS will work with
you and your representative to process your application.
Or enter “NA” on the name line if you are not using a
representative.
3. Enter whose interest the representative represents (e.g.
taxpayer, lender, title company, etc.). This allows the IRS
to determine what information can be shared with the
representative.
Section 5 – Lender/Finance Company Information
(Settlement/Escrow Company for Section 6325(b)(3) only)
Enter the company name, contact name, and phone number for
the title or escrow company that will be used at settlement.
Section 6 – Monetary Information
1. Provide the proposed property sale amount
2. Provide the amount of proceeds the IRS can expect for
application to the tax liability.
3. Enter NA for the amount of proceeds the IRS can expect, if
you anticipate there will be no proceeds.
Section 7 - Basis for Discharge
Discharge of property from the federal tax lien may be granted
under several Internal Revenue Code (IRC) provisions. After
reviewing the discharge sections, explanations, and examples
below, select the discharge section that best applies to your
application. If the IRS does not agree with your selection after
its review, an explanation of the decision will be provided.

Publication 783 (Rev. 12-2022) Catalog Number 46755I Department of the Treasury Internal Revenue Services www.irs.gov

1. 6325(b)(1) – a discharge may be issued under this
provision if the value of the taxpayer’s remaining property
encumbered by the federal tax lien is equal to at least twice
the amount of the federal tax liability secured by the lien
and any encumbrance entered into before the IRS filed its
public notice of the lien. If there are mortgages, state and/
or local taxes, mechanics liens, etc., the amount of these
debts would be added to the amount of the tax liability and
multiplied by 2.
Example
Tax liability
Other Debts

$15,500

+ $23,334

$38,834

x
2

$77,668

The property remaining subject to the lien must be at least
$77,668.
2. 6325(b)(2)(A) – a discharge may be issued under this
provision when the tax liability is partially satisfied with an
amount paid that is not less than the value of the United
States’ interest in the property being discharged. For
example, the IRS has a lien totaling $203,000 and:
•

Property selling for:

$215,000

•

Minus encumbrances senior to IRS lien:

$135,000

•

Minus proposed settlement costs:

$ 15,000

•

The IRS lien interest equals:

$ 65,000

After the IRS receives and applies the $65,000 in partial
satisfaction of the tax liability, there remains an outstanding
tax debt of $138,000.
In the case of Tenancy by Entireties property, the United
States is generally paid one-half of the proceeds in partial
satisfaction of the liability secured by the tax lien.
3. 6325(b)(2)(B) – a discharge may be issued under this
provision when it is determined that the government’s
interest in the property has no value. The debts senior to
the federal tax lien are greater than the fair market value of
the property or greater than the sale value of the property.
Submit a copy of the proposed escrow agreement as part
of the application.
4. 6325(b)(3) – a discharge may be issued under this
provision if an agreement is reached with the IRS allowing
the property to be sold. Per an escrow agreement the sale
proceeds must be held in a fund subject to the claims
of the United States in the same manner and priority
the claims had prior to the property being discharged.
For example, there are two mortgages senior to the IRS
tax lien totaling $32,000 and $5,000. The government’s
interest in the property is $40,000 and there are liens on
the property junior to the IRS lien in the amount of $3,000,
$12,000 and $2,990. The proceeds from the sale would be
dispensed by paying the debts in the following sequence.
a. $32,000
b. $5,000
c. $40,000
d. $3,000
e. 12,000
f. $2,990

Submit a copy of the proposed escrow agreement.
5. 6325(b)(4) – a discharge will be issued under this provision
to a third party who owns the property if a deposit is made
or an acceptable bond provided equal to the government’s
interest in the property. In the case of Tenancy by
Entireties property, a deposit or an acceptable bond
totaling one-half the government’s interest in the property
must be made. If you are the property owner (but not the
taxpayer, i.e., you are not responsible for the tax liability)
and you make a deposit or post an acceptable bond to
obtain a discharge under this section, you have 120 days
to file an action in federal district court, under section
7426(a)(4), challenging the IRS’ determination of the
government’s lien interest. This is the exclusive remedy
available to the third party for the return of the deposit
or accepted bond or a portion thereof. An administrative
request for refund and a refund suit in district court is not
available. The Circular 570, available at https://fiscal.
treasury.gov/surety-bonds/ contains a list of companies
certified by the Secretary of the Treasury as providers of
acceptable securities.
6. 6325(c) – a discharge of property subject to an Estate Tax
Lien is not covered in this publication. Please refer to Form
4422.
Section 8 – Description of Property
1. Enter a detailed description of the property to be

discharged from the federal tax lien.

2. When the property is real estate include the type of
property, for example, 3-bedroom house; etc. When the
property is personal property include serial or vehicle
numbers, as appropriate, for example, 2002 Cessna twin
engine airplane, serial number AT919000000000X00; etc.
3. Provide the physical address if real estate or physical

location address if personal property.

4. Check the appropriate box to indicate whether you

attached a copy of the title or deed to the property.

5. If you are applying under 6325(b)(1) check the “Attached”
box and attach copies of the titles or deeds for property
remaining subject to the lien. If you are not applying under
6325(b)(1) check the “NA” box.
Section 9 – Appraisal and Valuations
1. Check the “Attached” box after “Required Appraisal”
indicate whether you have attached the required
appraisal by a disinterested third party. This is typically a
professional appraisal providing neighborhood analysis;
description of the site; description of the improvements;
cost approach; comparable sales; definition of market
value; certification; contingent and limiting conditions;
interior and exterior photos of the property; exterior photos
of comparable sales used; comparable sales location map;
sketch of subject property showing room layout; flood map
and qualifications of the appraiser.
2. Check the appropriate box under the “Plus One of the
Following Additional Valuations” section to indicate which
other type of property value verification is attached with
your application.
Note: For applications under IRC 6325(b)(1), valuation
information described above must also be provided for
property remaining subject to lien.

Note: For property being sold at public auction, provide
the date and place of the sale, the proposed amount for
which the property will be sold, and a statement that the
United States will be paid in the proper priority from the
proceeds.

2. An escrow agreement must specify type of account,
name and depositary for account, conditions under which
payment will be made, cost of escrow, and the name
and address of any party identified as part of the escrow
agreement.

Section 10 − Federal Tax Liens

Section 16 − Waiver

This section is important when the applicant and the taxpayer
are different. If the applicant and the taxpayer are the same, this
section may be skipped.

This section applies only if you are:

1. Check the “attached” box if you have attached copies of
the liens with your application.
2. If you checked the “no” box list the System Lien
Identification Number (SLID) found in the top right hand
box of the lien document, if available. If you do not have
the number(s) enter “unknown” in the first box.
Section 11 − Sales Contract/Purchase Agreement
1. Check the box indicating whether the proposed sales

contract or purchase agreement is attached.

2. If you checked the “no” box, describe how the taxpayer
named on the lien will be divested of their interest in the
property or why they have no interest in the property.
Section 12 − Title Report
1. Check the box indicating whether the title report is

attached.

2. If you checked the “no” box, use the space provided to list
any encumbrances (liens or claims) against the property
that came into existence before the United States’ lien
interest or which have priority over the lien. Include name
and address of holder; description of encumbrance,
e.g., mortgage, state lien, etc.; date of agreement;
original amount and interest rate; amount due at time
of application; and family relationship of the holder, if
applicable.
3. Attach a separate sheet with the information in item # 2
above if there is not enough space provided on the form.
Section 13 − Closing Statement
1. Check the box indicating whether the proposed closing
statement is attached. This statement is often referred to
as a HUD-1.
2. If you checked the “no” box, use the space provided to
itemize all proposed costs, commissions, and expenses of
any transfer or sale associated with property.
3. Attach a separate sheet with the information in item # 2
above if there is not enough space provided on the form.
Section 14 − Additional Information
1. Check the box indicating whether you are attaching other
documents relevant to the discharge application. This
could include affidavits or court documents.
2. Check the “no” box if you do not have any additional

documentation.

Section 15 − Escrow Agreement
1. Check the box indicating whether you are attaching a
draft escrow agreement. This is only applicable if you are
applying under 6325(b)(3).

• The property owner, but
• Not liable for the tax debt (i.e. not named on the lien), and
• Applying under 6325(b)(2)(A).
By checking the “Waive” box you are waiving the option to
have the payment treated as a deposit under section 6325(b)(4)
which has the accompanying right to request a return of funds
and to bring an action under section 7426(a)(4).
If you check the “no” box, your application will automatically
be considered under 6325(b)(4) which provides for return of
deposited funds and a court challenge under 7426(b)(4).
Section 17 − Declaration
The applicant or their authorized Power of Attorney signs
the application form. You must sign your application under
penalties of perjury attesting to having examined the
application, accompanying schedules or documents, exhibits,
affidavits, and statements and declaring to the best of your
knowledge and belief that it is true, correct and complete.

Frequently Asked Questions
Q1: When do I make a payment?
The Internal Revenue Code section under which the certificate
of discharge will be issued or granted determines the details
regarding making a payment.
• Discharge under 6325(b)(1) or 6325(b)(2)(B) does not

require a payment.

• Discharge under 6325(b)(2)(A) requires a payment, but do
not send a payment with the application. The Advisory
Group Manager will notify you, after determining the
amount due, when to send payment.
NOTE: If a mortgage foreclosure is anticipated, the
application is made under section 6325(b)(2)(A) or 6325(b)(2)(B).
A determination will be made that either an amount is required
for discharge or the United States’ interest is valueless.
In the case of foreclosure you will receive, within 30 days of the
receipt of a complete and approved application, a conditional
commitment letter for a certificate of discharge.
NOTE: Relocation Expenses - If a discharge under 6325(b)(2)
(A) or 6325(b)(2)(B) is issued and if the sale is of the principal
residence, the taxpayer may be eligible for a relocation expense
allowance because of an inability to pay. The relocation
expense allowance is subject to limitations. To apply for
the allowance complete and submit Form 12451, “Request
for Relocation Expense Allowance” with the application for
discharge.
Discharge under 6325(b)(3) requires a payment, but do not
send a payment with the application. First, the draft escrow
agreement must be submitted.

Second, the Advisory Group Manager approves the escrow
agent selected by the applicant; any reasonable expenses
submitted as incurred in connection with the sale of the
property; the claim amounts and priorities, and the distribution
timing of the fund.
Third, the agreement is finalized and contains signatures of all
parties involved including Advisory Group Manager prior to the
discharge being issued.
Note: The escrow account must be funded before payment of
any claim or lien through money paid by the applicant or from
the sale proceeds.
Discharge under 6325(b)(4) requires a bond or deposit but do
not send one with the application. The Advisory Group manager
must first determine the amount of bond or deposit needed
for the discharge and determine that the bond company, if
applicable, is from the approved list.
Q2: What is an acceptable form of payment?
Make payments in cash or by the following types of checks:
certified; cashiers; or treasurer’s check. The check must be
drawn on any bank or trust company incorporated under the
laws of the United States, or of any state, or possession of
the United States. Payment can also be made using a United
States postal, bank, express or telegraph money order.
Important! If you pay by personal check, issuance of the
certificate of discharge will be delayed until the bank honors the
check.
Q3: Who makes the decision to issue a Certificate of
Discharge?
In all cases Advisory staff will review and verify the information
provided, determine whether a certificate of discharge should
be issued, and contact you with any questions. Advisory may
contact you, your representative, or any person relative to the
transaction for additional information.
The Advisory Group Manager has the responsibility to review
and approve the determination and let you know the outcome.
If approved, you will receive a conditional commitment letter.
Q4: When will I receive the Certificate of Discharge?
The Internal Revenue Code under which the certificate of
discharge will be issued or granted and the time at which you
are divested of your interest in the property determines when
you will receive the certificate.
• Under 6325(b)(1) you will receive the certificate when it is
determined the remaining property meets the criteria of the
provision.
• Under 6325(b)(2)(A) you will receive the certificate after
IRS receives payment of the agreed upon amount in partial
satisfaction of the tax liability, proof that the taxpayer has
been divested of title, and receipt of a copy of the final
settlement statement.
• Under 6325(b)(2)(B) you will receive the certificate when
it is determined that the government’s interest in the
property is valueless, the IRS has received proof that the
taxpayer has been divested of title, and a copy of the final
settlement statement.

NOTE: Under provisions 6325(b)(2)(A) and 6325(b)(2)(B) at
the conclusion of a mortgage foreclosure the certificate will
be issued in accordance with the terms of the conditional
commitment letter. Also see, Publication 487, How to Prepare
an Application Requesting the United States to Release Its
Right to Redeem Property Secured by a Federal Tax Lien.
• Under 6325(b)(3) you will receive the certificate when the
amount of the government’s interest in the property has
been placed in the approved escrow account.
• Under 6325(b)(4) you will receive the certificate when the
amount equal to the government’s interest in the property
is received or an approved bond has posted.
Q5: What happens if my application is denied?
If your application is denied, you will receive Form 9423,
Collection Appeal Request and Publication 1660, Collection
Appeal Rights, with an explanation of why your application was
denied.

Privacy and Paperwork Reduction
Act Notice
The Privacy act of 1974 says that when we ask you for
information about yourself, we must first tell you our legal right
to ask for the information, why we are asking for it, and how it
will be used. We must also tell you what could happen if you do
not provide it and whether or not you must respond under the
law.
We ask for the information on this form to carry out the Internal
Revenue laws of the United States. This information requested
on this form is needed to process your application and to
determine whether the federal tax lien can be discharged. You
are not required to apply for discharge; however, if you want the
federal tax lien to be discharged, you are required to provide
the information requested on this form. Section 6109 requires
you to provide the requested identification numbers. Failure to
provide this information may delay or prevent processing your
application; providing any false information may subject you to
penalties.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for individuals filing this form is approved under OMB control
number 1545-2174. The estimated burden for those who file
this form is shown below.
• Recordkeeping 2 hr., 45 min.
• Learning about the law or the form 2 hr.
• Preparing the form 1 hr., 30 min.
• Copying, assembling, and sending the form to the IRS 85
min.
Routine uses of this information include giving it to the
Department of Justice for civil and criminal litigation, and
to cities, states, the District of Columbia, and United States
commonwealths and possessions for use in administering their
tax laws. Advisory may contact you, your representative, or any
person relative to the transaction for additional information.
We may also disclose this information to other countries
under a tax treaty, to federal and state agencies to enforce
federal nontax criminal laws, or to federal law enforcement and
intelligence agencies to combat terrorism.