IRS Form 14135 – If you’re dealing with a federal tax lien that’s clouding your ability to sell, refinance, or transfer property, IRS Form 14135 could be your key to relief. This official application allows you to request a Certificate of Discharge of Property from Federal Tax Lien, removing the IRS’s claim from specific assets without fully settling your tax debt. In this comprehensive guide, we’ll break down everything you need to know about IRS Form 14135—from eligibility and filing steps to required documents and processing times. Whether you’re a homeowner, business owner, or third-party buyer, understanding this form can help you navigate tax lien challenges efficiently.
Last updated: Based on IRS revisions as of November 2024.
Download the official IRS Form 14135 PDF here.
What Is IRS Form 14135 and Why Does It Matter?
A federal tax lien arises when the IRS assesses unpaid taxes and files a public notice of lien, attaching to all your property and rights to property. This can complicate real estate transactions, loans, or asset sales by alerting creditors and buyers to the IRS’s interest. Enter IRS Form 14135, the standardized application for discharging specific property from this lien under Internal Revenue Code (IRC) Section 6325(b).
The form’s purpose is straightforward: It requests the IRS to issue a certificate confirming that the lien no longer attaches to the named property. This doesn’t forgive your overall tax debt—it’s targeted relief for one asset, often to facilitate a sale or refinance where proceeds can partially or fully satisfy the IRS’s claim.
Why file? Without a discharge, potential buyers or lenders may back out, fearing IRS intervention. For instance, if you’re selling your home to relocate, Form 14135 ensures the title transfers cleanly while directing sale proceeds toward your liability. It’s a critical tool for taxpayers, estate executors, or even third-party purchasers facing lien encumbrances.
Who Should File IRS Form 14135?
Not everyone with a tax lien needs this form—it’s for those seeking to free specific property from the lien’s grip. Eligible filers include:
- Taxpayers: Individuals or businesses named on the lien notice, looking to sell or refinance encumbered assets.
- Third Parties: Purchasers, transferees, new owners, lenders, or attorneys representing non-taxpayer interests (e.g., a buyer acquiring property from a liened seller).
- Estate Representatives: When selling real property from a deceased person’s estate.
If you’re not the taxpayer, you’ll need to attach a copy of the lien notice and explain your relationship to the property. Note: This form doesn’t apply to estate tax liens (use Form 4422 instead).
Types of Discharges Under IRC Section 6325(b)
IRS Form 14135 supports five main discharge types, each with unique criteria. Choose the one that fits your situation based on property value, sale proceeds, and IRS interest. Refer to IRS Publication 783 for detailed examples.
| Discharge Type | IRC Section | Key Criteria | Best For |
|---|---|---|---|
| Equity in Remaining Property | 6325(b)(1) | Remaining encumbered property value ≥ 2x (tax liability + senior liens). | Taxpayers with substantial other assets; attach valuations for all remaining property. |
| Partial Satisfaction of Lien | 6325(b)(2)(A) | Sale proceeds ≥ IRS interest (after senior liens/costs); pay IRS share at closing. | Home sales or refinances; for joint tenancy by entireties, pay half the proceeds. |
| No Equity in Property | 6325(b)(2)(B) | Property value ≤ senior liens; no proceeds to IRS. | Distressed sales where IRS gets nothing; requires escrow for future claims. |
| Escrow Arrangement | 6325(b)(3) | Proceeds held in escrow, distributed per lien priority after sale. | Complex sales with multiple creditors; attach draft escrow agreement. |
| Deposit or Bond | 6325(b)(4) | Third-party deposits cash/bond = IRS interest; challengeable in court within 120 days. | Non-taxpayer owners; use approved sureties per IRS Circular 570. |
These options ensure the IRS is protected while allowing legitimate transactions to proceed.
Step-by-Step Guide: How to File IRS Form 14135
Filing IRS Form 14135 is a structured process. Download the form from the IRS website and gather documents early—processing can take time. Here’s how to complete it:
- Gather Basic Info: Review your Notice of Federal Tax Lien (Form 668(Y)(c) or similar). Note the taxpayer’s details, lien serial number, and property description.
- Complete Section 1: Taxpayer Information: Enter the name, SSN/EIN, address, and contact details as shown on the lien notice.
- Fill Section 2: Applicant Information: If you’re not the taxpayer, check the box, explain your role (e.g., “Purchaser”), and attach the lien copy.
- Detail Involved Parties (Sections 3-5): List purchaser/transferee, attorney (attach Form 2848/8821 if applicable), and lender/escrow details.
- Enter Monetary Details (Section 6): State the proposed sales price and expected IRS proceeds (e.g., $0 if no equity).
- Select Basis for Discharge (Section 7): Check the relevant IRC box and review notes for third-party filers.
- Describe the Property (Section 8): Provide a full description (e.g., “Single-family home at 123 Main St., Anytown, USA”). Attach deed/title for real estate.
- Provide Valuations (Section 9): Include a professional appraisal plus one more (e.g., county assessment). For 6325(b)(1), value all remaining property.
- Attach Liens and Contracts (Sections 10-11): Include lien copies, sales agreement, or divestiture explanation.
- List Senior Encumbrances (Section 12): Detail mortgages/liens ahead of the IRS (name, amount, date).
- Itemize Closing Costs (Section 13): Attach HUD-1 or list fees/commissions.
- Add Extras (Sections 14-16): Include affidavits, escrow drafts, or waivers for third-party claims.
- Sign and Date (Section 17): Declare under penalty of perjury. Businesses need a title (e.g., “President”).
Expect follow-up questions from the IRS Advisory Group. Do not send payments with the form—arrange them post-approval.
Required Documents for IRS Form 14135
A complete application is crucial to avoid delays. Always mark “Attached: Yes/No” on the form. Essential attachments include:
- Copy of Federal Tax Lien: Mandatory if filer ≠ taxpayer.
- Property Deed/Title: Legal description for real estate.
- Professional Appraisal: From a disinterested appraiser (include market analysis, comparables).
- Additional Valuation: E.g., sales contract price, tax assessment, or informal estimate.
- Title Report: Listing all senior liens with details.
- Closing Statement: HUD-1 form or itemized expenses.
- Sales Contract: If available.
- Escrow Agreement Draft: For 6325(b)(3) or (b)(2)(B).
- Power of Attorney: Form 2848/8821 for representatives.
- Other: Affidavits, court orders, or relocation expense forms (e.g., Form 12451 for principal residences).
Scan and label attachments clearly. For public auctions, add sale details.
Where to File IRS Form 14135 and Processing Timeline?
Mail your completed IRS Form 14135 and attachments to:
IRS Advisory Consolidated Receipts
7940 Kentucky Drive, Stop 2850F
Florence, KY 41042
For questions, call 859-594-6090 or consult Publication 4235 for local Advisory offices.
Timeline: Submit at least 45 days before your closing or transaction date. The IRS aims for a conditional commitment within 30 days for foreclosures under 6325(b)(2). Full processing varies:
- Approval: Certificate issued upon payment/escrow funding.
- Denial: You’ll receive Form 9423 with appeal rights (see Publication 1660).
Track your case via the Centralized Lien Operation at 1-800-913-6050.
Common Mistakes to Avoid When Filing Form 14135
- Incomplete Valuations: Skipping the required appraisal or underestimating remaining property equity.
- Missing Attachments: Forgetting lien copies or title reports leads to rejection.
- Wrong IRC Section: Misapplying discharge types (e.g., using 6325(b)(1) without double-equity proof).
- Early Payments: Don’t send money upfront—wait for IRS instructions.
- Rushed Filing: Underestimating the 45-day window causes transaction delays.
Pro Tip: Consult a tax professional or revenue officer early to confirm owed amounts.
FAQs About IRS Form 14135
How long does it take to get a Certificate of Discharge?
Typically 30-45 days for review, plus time for payments/escrow. Plan ahead!
Can I file Form 14135 online?
No, it’s mail-only. Use certified mail for tracking.
What if my application is denied?
Appeal using Form 9423; the IRS must explain the denial.
Does discharge remove the entire lien?
No, just from the specified property. The lien stays on other assets.
Who approves the application?
IRS Advisory Group Managers, based on IRC criteria.
Final Thoughts: Take Control of Your Tax Lien with Form 14135
Navigating a federal tax lien doesn’t have to halt your financial plans. By filing IRS Form 14135 correctly, you can secure a Certificate of Discharge, enabling smooth property transactions while addressing your IRS obligations. Start by downloading the form, reviewing Publication 783, and assembling documents today. If your situation involves complex debts, consider professional tax advice to maximize success.
For more IRS resources, visit irs.gov. Remember, timely action protects your assets and credit—don’t let a lien linger.
This article is for informational purposes only and not tax advice. Consult a qualified professional for personalized guidance.