Certificate of Discharge From Federal Tax Lien

[rjholmes]

My clients married in 2005. Shortly before his marriage he was assessed tax from 2002 for failure to file and report retirement income. Shortly after their marriage she withdrew $100,000 from her retirement and they did not report that amount of their 2005 return. In 2006 a tax lien was put on HER property that she owned prior to their marriage. Even though his name is not on the property, the recorder's office attached his 2002 lien to her property. We are hoping to get that lien discharged.

On Form 14135 Application for Certificate of Discharge of Property From Federal Tax Lien, #7 basis for discharge, which box should be checked? I am thinking box 3, interest of the United States in the property to be discharged has no value, since the assessed tax was in his name and the property is hers.

[mscash]

Discharge of Lien

The Notice of Federal Tax Lien attaches only to the taxpayer's property. Since the taxpayer/wife lives with her new husband the notice of lien has the addreses where she lives which happens to be property owned by her husband who is not the taxpayer. This means that is where the mail goes not that the lien attaches to the property so you don't need to apply for a discharge and don't need to get stress out about it. If it every became a problem you would need to apply for a certificate of non-attachment which is a different thing.

[rjholmes]

The Notice of Federal Tax Lien attaches only to the taxpayer's property. Since the taxpayer/wife lives with her new husband the notice of lien has the addreses where she lives which happens to be property owned by her husband who is not the taxpayer. This means that is where the mail goes not that the lien attaches to the property so you don't need to apply for a discharge and don't need to get stress out about it. If it every became a problem you would need to apply for a certificate of non-attachment which is a different thing.

No, the lien is not on their residence. It is on commercial property that has been hers for a number of years. The county recorder said it should not have been attached to that property but since it has the taxpayer will have to get a release from IRS, which requires the completion of Form 14135. I have all the documents to send with it. I just need to be sure I check the correct box.