I have the approval letter from Wells Fargo, however with out them paying a $43K IRS lien. When I asked the negotiator to add that back to the approval letter I got the following:

 

(BNK negotiator)Good Morning,

Please be advised the IRS does release these liens from title on a short sale.  The debt will still be the responsibility of the seller after the short sale is closed.  If this is not acceptable then the short sale approval will be null and void. (end BNK)

 

     In this case, the seller's accountant has a letter from the IRS indicating they have ceased all collection efforts and deemed the account uncollectable, so the seller of course does not want to stir the pot. However, if there is a form that can be floated up to them through his accountant that will get that lien just released as the Bank says can be done in a short sale where the seller is getting nothin, can someone please tell me what that form or proceedure is so this sale does not go down in flames.

Thank you,

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Replies to This Discussion

 'Application for Certificate of Discharge of Property from Federal Tax Lien (Form 14135)'

This should help you out.  I've done this with prior short sales.  Also contact your local IRS office rep for you client and they help you with preparing things properly.  It can be done.

You might want to have the sellers sign Form 8821 as well, which is the Tax Information Authorization.  I don't know if it's mentioned in the other posts or not.

Vincent - This is fairly easy for the Seller to get done.  Others have provided some great info.  Basically, the seller must contact the IRS and ask for it to be removed.  There are some forms and it takes about 3 - 6 weeks to get it done.  If there is a local IRS office in the area of the seller, he should make an appointment and go see an IRS service agent with the forms already completed.

Best of luck,

Thom Colby

CA Broker / Owner

Thom is spot on, Seller needs to reach out to the IRS, and it takes 3-6 weeks to get removed (you generally need not pay them, BUT, they will retain their right to come after the Seller for the delinquent taxes).

Keep fighting.....you will get it done!!!

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