I had a short sale with Wells Fargo last year where they paid a $6000 Federal tax lien. It was a $180,000 sale.
From what I've found out you need to ask the Fed for a release of lien. That would be Form 14135 "Application for Certificate of Discharge of Property from Federal Tax Lien". You will also more than likely need form 8821 "Tax Information Authorization" which give you 3rd party auth.
As for the state liens I am not sure and am investigating that.
Lydia
So part 2 of my response re State Tax Liens...if you are in California you need to have the approval letters 1st, once you have those you need to request a partial release of lien and subordination of lien AND include the approval letter in your package.
Here is the link, https://www.ftb.ca.gov/individuals/liens/rlslien.shtml
They do not give 3rd party authorizations to agents so you need to touch base with your escrow officer to track the package with the state. Here is the link re escrow instructions, https://www.ftb.ca.gov/individuals/liens/title_escrow_companies.shtml
One thing to be aware of is that the State MUST have an appraisal either from the lender or the buyer. In california the entire package needs to be sent either via fedex or UPS (overnight) and then once it is received it is assigned to a rep who will review the package, there after it will take approximately 21 days to get the release so if your approval letter has a COE date you should ask for an extension.
Good luck!
Lydia
We have been successful in getting the discharges of the Irs Tax Liens so the short sale can go through!
Once you know what docs to submit it will be no problem. I get tax liens (state and fed) released with ease.
Depends on the State. Although it is a Federal lien. certain states such as Illinois foreclosure will remove those liens. I am working on a case now involving State Dept of Revenie liens and Federal tax liens (9 in all) in a shortsale. In my case, I have negotiated to have them lifted from the property - all 9 and two additional mortgages.
Best of Luck!
Carmine
I had a Federal Tax Lein released last year had to have an independent appraisal and a form form the IRS and release it the lein for the sale of the property. Seller can not make any monies and in a short sale they don't easy....Joyce
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