Instructions On How To Apply For Certificate Of Discharge From Federal Tax Lien (Page 4 of 4) in pdf

Note: The escrow account must be funded before payment of

commitment letter. Also see,

Publication

487, How to Prepare

an Application Requesting the United States to Release Its

any claim or lien through money paid by the applicant or from

Right to Redeem Property Secured by a Federal Tax Lien.

the sale proceeds.

• Discharge under 6325(b)(4) requires a bond or deposit but

• Under 6325(b)(3) you will receive the certificate when the

do not send one with the application. The Advisory Group

amount of the government’s interest in the property has been

placed in the approved escrow account.

manager must first determine the amount of bond or deposit

needed for the discharge and determine that the bond com-

• Under 6325(b)(4) you will receive the certificate when the

pany, if applicable, is from the approved list.

amount equal to the government’s interest in the property is

received or an approved bond has posted.

Q2: What is an acceptable form of payment?

Q5: What happens if my application is denied?

Make payments in cash or by the following types of checks: cer-

If your application is denied, you will receive

Form 9423, Col-

tified; cashiers; or treasurer’s check. The check must be drawn

lection Appeal Request

and

Publication 1660, Collection Appeal

on any bank or trust company incorporated under the laws of

Rights, with an explanation of why your application was denied.

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

Privacy and Paperwork Reduction Act Notice

certificate of discharge will be delayed until the bank honors the

The Privacy act of 1974 says that when we ask you for informa-

check.

tion 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

Q3: Who makes the decision to issue a Certificate of

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.

Discharge?

In all cases Advisory staff will review and verify the information

We ask for the information on this form to carry out the Internal

provided, determine whether a certificate of discharge should

Revenue laws of the United States. This information requested

be issued, and contact you with any questions. Advisory may

on this form is needed to process your application and to

contact you, your representative, or any person relative to the

determine whether the federal tax lien can be discharged. You

transaction for additional information.

are not required to apply for discharge; however, if you want the

federal tax lien to be discharged, you are required to provide

The Advisory Group Manager has the responsibility to review

the information requested on this form. Section 6109 requires

and approve the determination and let you know the outcome.

you to provide the requested identification numbers. Failure to

If approved, you will receive a conditional commitment letter.

provide this information may delay or prevent processing your

application; providing any false information may subject you to

Q4: When will I receive the Certificate of Discharge?

penalties.

The Internal Revenue Code under which the certificate of dis-

The time needed to complete and file this form will vary de-

charge will be issued or granted and the time at which you are

pending on individual circumstances. The estimated burden

divested of your interest in the property determines when you

for individuals filing this form is approved under OMB control

will receive the certificate.

number 1545-2174. The estimated burden for those who file

this form is shown below.

• Under 6325(b)(1) you will receive the certificate when it is

determined the remaining property meets the criteria of the

• Recordkeeping 2 hr., 45 min.

provision.

• Learning about the law or the form 2 hr.

• Under 6325(b)(2)(A) you will receive the certificate after IRS

• Preparing the form 1 hr., 30 min.

receives payment of the agreed upon amount in partial sat-

• Copying, assembling, and sending the form to the IRS 85

isfaction of the tax liability, proof that the taxpayer has been

min.

divested of title, and receipt of a copy of the final settlement

Routine uses of this information include giving it to the Depart-

statement.

ment of Justice for civil and criminal litigation, and to cities,

• Under 6325(b)(2)(B) you will receive the certificate when it

states, the District of Columbia, and United States common-

is determined that the government’s interest in the property

wealths and possessions for use in administering their tax laws.

is valueless, the IRS has received proof that the taxpayer

Advisory may contact you, your representative, or any person

has been divested of title, and a copy of the final settlement

relative to the transaction for additional information. We may

statement.

also disclose this information to other countries under a tax

NOTE: Under provisions 6325(b)(2)(A) and 6325(b)(2)(B)

treaty, to federal and state agencies to enforce federal nontax

at the conclusion of a mortgage foreclosure the certificate

criminal laws, or to federal law enforcement and intelligence

will be issued in accordance with the terms of the conditional

agencies to combat terrorism.

Publication 783 (Rev. 6-2010)

Catalog Number 46755I

Department of the Treasury Internal Revenue Services

Instructions On How To Apply For Certificate Of Discharge From Federal Tax Lien Page 4

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