There are dozens of types of liens based on circumstances calling for the Lien. Some Liens are ordered by the Court and some can be placed by a contractor looking to be paid.
For purposes of this discussion, we will talk only about the IRS lien removals. It can take days or weeks to have a Lien removed. If you anticipate this may be necessary, contact TDRS before it will be required.
The IRS places liens on your property if you are in debt to them. As of 2018, Liens were only placed if you owed OVER $10,000.
Many times we are called and informed that a Closing is delayed waiting for a Lien Removal. In some cases, we were able to remove a Lien in hours. That was only because the Lien Specialist was available and worked quickly with us. Often we are not that lucky.
A lien removal (not a Subordination) on property requires the completion of Form 14135. Then it is submitted to a Lien Specialist within the IRS. After the Lien Specialist reviews the form, he\she will contact us and verify all required documents are included. Form 14135 is the most common form used in a tax case. With this form a copy of the purchase agreement is required as well as a copy of an Appraisal. (In one case, a TDRS clients Closing was delayed because no formal appraisal was performed.)
Will the IRS subordinate for a Closing? It depends. Subordination means that the IRS has first right to your money at closing and the bank may not be paid in full.
Form 14134 requests the IRS subordinate their lien position so a closing will go thru. Once the closing is complete, the IRS will place the Lien back in place. The IRS will not just be nice and subordinate so your closing will go thru. To even begin the process, it requires investigation of Lien positions and amount owed by all interested parties.
Subordinations are most seen at refinancing. Your new bank will not have first position after closing; the IRS will. Due to this a Form 14134 is filed showing the IRS even if they take 2nd position, there will be enough money in the event of a default. TDRS can assist you with this issue.