PDF document

- 1 -

Instructions on how to apply for a

Certiicate of Subordination of Federal Tax Lien
A Certiicate of Subordination under Internal Revenue Code tion on the Notice of Federal Tax Lien, enter your name
Section 6325(d)(1) and 6325(d)(2) allows a named creditor (include any name changes), current address, daytime
to move their junior creditor position ahead of the United phone number and fax number.
States’ position for the property named in the certiicate. For 4. If you are not the taxpayer, enter in the box next to
How to Apply for a Certiicate of Subordination of Federal
“Name” your relationship to the taxpayer (e.g. parent,
Estate Tax Lien Under Section 6325(d)(3) of the Internal
uncle, sister, no relation, etc.).
Revenue Code use Publication 1153.
1. Complete Form 14134, Application for Certiicate of Section 3 - Property Owner
Subordination of Federal Tax Lien attached with this
publication. 1. Check the box on the irst line of Section 3 if you are
both the property owner and the applicant.
2. Mail the completed Form 14134 and the appropriate 2. Enter the name of the property owner. Or if you have
attachments to: checked the box indicating you are both the applicant
IRS, Attn: Advisory Group Manager and the property owner, enter, “same as applicant”.
(Refer to Publication 4235, Collection Advisory Group
Addresses for the correct address. The correct address 3. Enter the property owner’s relationship to the taxpayer
is the ofice assigned to the location where the property (e.g. taxpayer, parent, no relation, etc.).
is located.)
Section 4 - Attorney/Representative Information
If you have any questions, contact the applicable Advisory
Ofice. This section is used to list the taxpayer’s representative or a
representative of a party other than the taxpayer, such as the
If you want to know how much you owe in order to pay the lender, needing to receive information from the IRS. Howev-
lien(s) in full, call 1-800-913-6050, visit the nearest Taxpayer er, you do not need a representative to request subordination
Assistance Center, or contact the revenue oficer assigned to of the federal tax lien.
your case.
1. Check the box on the irst line of Section 4 if you are
Important! attaching a Form 8821 (Tax Information Authority) or
Form 2848 (Power of Attorney) with your application. If
Please submit your application at least 45 days before you are attaching one of these forms, please make sure
the transaction date that the certiicate of subordination is it is completely illed out, signed, and dated. You must
needed. Doing so will allow suficient time for review, de- provide one of these forms if the representative repre-
termination, notiication and the furnishing of any applicable sents an interest other than the taxpayer.
documents by the transaction date.
2. Enter the name, address, phone number, and fax
number of your representative in this action. The IRS will
Information Required on the Application work with you and your representative to process your
application. Or enter “NA” on the name line if you are
Section 1 - Taxpayer Information not using a representative.
3.
1. Enter the name and address of the individual(s) or busi- Enter whose interest the representative represents (e.g.
ness as it appears on the Notice(s) of Federal Tax Lien taxpayer, lender, title company, etc.). This allows the
(NFTL). A second name line is provided if needed. IRS to determine what information can be shared with
2. Enter, if known, the last 4 digits of the social security the representative.
number (SSN) or full employer identiication number as
it appears on the NFTL. Section 5 - Lender/Finance Company Information
3. Enter, if known and if applicable, the last 4 digits of any 1. Enter the company name, contact name, phone number,
spousal SSN (secondary SSN) associated with the tax and fax number for the lender you are requesting the
debt listed on the NFTL. United States subordinate its interest to.
4. Provide a daytime phone number and a fax number. 2. Enter the type of transaction. For example, a loan
consolidation or reinance often prompts a subordination
Section 2 - Applicant Information request.
1. Check the box on the irst line of Section 2 if you are
both the taxpayer and the applicant. If you are not the Section 6 - Monetary Information
taxpayer, attach a copy of the lien. 1. Enter the amount of your existing or outstanding inanc-
2. If you have checked the box indicating that you are the ing.
taxpayer and your information is the same as listed on 2. Enter the amount of new inancing you are seeking.
the lien, enter “same as taxpayer” on the name line. 3. Enter the amount anticipated being paid toward the
3. If you are not the taxpayer or you are the taxpayer but United States’ interest (For applications requested under
your information is no longer the same as the informa- 6325(d)(1) only).
Publication 784 (Rev. -2010) 6 Catalog Number 46756T Department of the Treasury Internal Revenue Services www.irs.gov

- 2 -

Section 7 - Basis for Subordination Section 8 - Description of Property
A subordination may be granted under Internal Revenue 1. Enter a detailed description of the collateral you will use
Code (IRC) 6325(d)(1) or 6325(d)(2). Review the informa- for the loan or other inancing. This is the collateral on
tion below and select the section which best applies to your which you want the lien interest subordinated to the loan
subordination request. If the IRS does not agree with your or inancing. If this is real estate, you must provide the
selection after its review, an explanation of the decision will legal description.
be provided. 2. When the property is real estate include the type
of property. For example, 3-bedroom house; etc.
6325(d)(1) - a subordination may be issued under this When the property is personal property include serial
section if you pay an amount equal to the lien or interest or vehicle numbers, as appropriate. For example,
to which the certiicate subordinates the lien of the United 2002 Cessna twin engine airplane, serial number
States. The following example uses an 80% loan to value AT919000000000X00; etc.
and a 3% closing cost to inancing ratio.
3. Provide the property’s physical address if it is real estate
Example: or provide the physical address where the property is
Current/New Original located, if it is personal property.
Fair Market Value $200,000 N/A 4. Check the appropriate box to indicate whether you
Reinance $160,000 $145,000 attached a copy of the title or deed to the property.
Closing Costs $ 4,800 N/A
United States Interest $ 10,200 N/A Section 9 - Appraisal and Valuations
In this example the United States’ interest is the equity 1. Check the “Attached” box after “Appraisal” to indicate
you obtain from your reinanced loan after paying off the whether you have attached an appraisal completed by a
existing loan of $145,000 and paying the closing costs disinterested third party. This is typically a professional
to obtain the loan. ($200,000 property value x 80% appraisal providing neighborhood analysis; descrip-
loan to value ratio = $160,000 reinance loan amount. tion of the site; description of the improvements; cost
$160,000 - $145,000 loan payoff = $15,000 potential approach; comparable sales; deinition of market value;
equity. $160,000 x 3% = $4800 closing costs to obtain certiication; contingent and limiting conditions; interior
the loan. $15,000 potential equity - $4,800 closing costs and exterior photos of the property; exterior photos of
= $10,200) The IRS would ask for $10,200 in return comparable sales used; comparable sales location map;
for the United States subordinating its interest to the sketch of subject property showing room layout; lood
reinanced loan. The lien remains on the property but map and qualiications of the appraiser. This type of
the reinanced loan has priority over the lien. appraisal is not required for a certiicate of subordi-
nation.
4. 6325(d)(2) – a subordination may be issued under this
section if the IRS determines that the issuance of the 2. Check the appropriate box under the “Or One of the
certiicate will increase the amount the government Following Valuations” section to indicate which type of
realizes and make collection of the tax liability easier. property value veriication is attached with your applica-
This might involve a reinance to a lower interest rate tion.
which would, if the subordination were granted, allow
a larger monthly repayment rate on the tax liability. Or Section 10 - Federal Tax Liens
the situation might be more complex. For example, AAA
This section is important when the applicant and the
Auto Sales currently pays the IRS $2000 per month on
taxpayer are different. If the applicant and the taxpayer are
a $120,000 tax debt. Their inventory needs replenish-
the same, this section may be skipped.
ing but their wholesaler is reluctant to provide added
inventory because of the federal tax lien. AAA requests 1. Check the “Attached” box if you have attached copies of
subordination and provides the IRS with documentation the lien(s) with your application.
that an inventory replenishment of 500 cars could allow
them to increase their monthly payment to $3000 as 2. If you checked the “no” box list the System Lien Identi-
well as increase their pay back rate to bi-weekly. In this ication Number (SLID) found in the top right hand box
example the United States’ interest would be second on of the lien document, if available. If you do not have the
the new inventory, if the subordination is granted. numbers enter “unknown” in the irst box.
For applications under section 6325(d)(2), complete
and attach a signed and dated statement describing Section 11 - Proposed loan agreement
how the amount the United States may ultimately realize 1. Check the “attached” box if you have attached the
through this subordination will increase and how collec- proposed mortgage contract and describe how subordi-
tion will be facilitated by the subordination. nation is in the best interests of the United States
5. 6325(d)(3) - Questions and applications for this section 2. If you checked the “no” box, describe how subordination
refer to Publication 1153 for instructions. is in the best interests of the United States.

Publication 784 (Rev. -2010) Catalog Number 46756T Department of the Treasury Internal Revenue Services www.irs.gov

- 3 -

Section 12 - Current title report Frequently Asked Questions
1. Check the “attached” box if you attached the title report.
This is required for subordination. Q1: When do I make a payment?
2. If you checked the “no” box and the title report is not at- The Internal Revenue Code section under which the certii-
tached, use the space provided to list any encumbranc- cate of subordination will be issued or granted determines
es (liens or claims) against the property and whether the details regarding making a payment.
those encumbrances are senior to the United States’
lien interest. Include the name and address of the • Subordination under 6325(d)(1) requires a payment, but
holder; description of the encumbrance, e.g., mortgage, do not send a payment with the application. The Advisory
state lien, etc.; date of agreement; original loan amount Group Manager will notify you after determining the
and interest rate; amount due at time of application; and amount due and when to send payment.
family relationship, if applicable. • Subordination under 6325(d)(2) does not require a pay-
ment.
3. If any mortgages listed on your title report are home
equity lines of credit (HELOCs), the NFTL takes priority
over advances made via the HELOC on the 46th day Q2: What is an acceptable form of payment?
after the NFTL is iled. This means any advances made Make payments in cash or by the following types of checks:
to you more than 46 days after the NFTL is iled, were certiied; cashiers; or treasurer’s check. The check must
made subject to the NFTL. The advances need to be be drawn on any bank or trust company incorporated under
included in the equity interest to which the United States the laws of the United States, or of any state, or possession
attaches. To make an accurate value determination and of the United States. Payment can also be made using a
to avoid processing delays with your application, provide United States postal, bank, express or telegraph money
documentation on any HELOC advances from the 46th order.
day after the NFTL was iled, through the date you
submit your application, and include expected advances Important! If you pay by personal check, issuance of the
through the date the certiicate will be issued. certiicate of subordination will be delayed until the bank
4. Attach a separate sheet titled “Section 12” with the infor- honors the check.
mation in item # 2 and # 3 above if there is not enough
space provided on the form. Q3: Who makes the decision to issue a Certiicate
of Subordination?
Section 13 - Proposed closing statement
1. Check the “attached” box if you attached the proposed In all cases Advisory staff will review and verify the informa-
closing statement. This statement is often referred to as tion provided, determine whether a certiicate of subordina-
a HUD-1. tion should be issued, and contact you with any questions.
Advisory may contact you, your representative, or any
2. If you checked the “no” box and you did not attach the person relative to the transaction for additional information.
proposed closing statement, use the space provided to
itemize all proposed costs, commissions, and expenses
to reinance the property. The Advisory Group Manager has the responsibility to
review and approve the determination and let you know the
3. Attach a separate sheet titled “Section 13” with the outcome. If approved, you will receive a conditional commit-
information in item # 2 above if there is not enough ment letter.
space provided on the form.

Section 14 - Additional Information Q4: When will I receive the Certiicate of
1. Check the “attached” box if you have attached other Subordination?
documents relevant to the subordination application. The Internal Revenue Code under which the certiicate of
This could include afidavits or court documents. subordination will be issued or granted determines when you
2. Check the “no” box if you do not have any additional will receive the certiicate.
documentation. • Under 6325(d)(1), you will receive the certiicate upon
receipt of the amount determined to be the interest of the
Section 15 - Declaration United States in the property subject to the federal tax
lien.
The applicant or their authorized Power of Attorney signs the • Under 6325(d)(2), you will receive the certiicate after
application form. You must sign your application under penal-
your application has been investigated and the informa-
ties of perjury attesting to having examined the application,
tion veriied. The Advisory Group Manager will notify you
accompanying schedules or documents, exhibits, afidavits,
of the decision and provide you with a projected date for
and statements and declaring to the best of your knowledge
mailing the certiicate of subordination.
and belief that the application is true, correct and complete.

Publication 784 (Rev. -2010) Catalog Number 46756T Department of the Treasury Internal Revenue Services www.irs.gov

- 4 -

Q5: What happens if my application is denied? may delay or prevent processing your application; providing
any false information may subject you to penalties.
If your application is denied, you will receive Form 9423,
Collection Appeal Request and Publication 1660, Collection The time needed to complete and ile this form will vary de-
Appeal Rights, with an explanation of why your application pending on individual circumstances. The estimated burden
was denied. for individuals iling this form is approved under OMB control
number 1545-2174. The estimated burden for those who
ile this form is shown below.
Privacy and Paperwork Reduction Act Notice • Recordkeeping 2 hr., 45 min.
The Privacy act of 1974 says that when we ask you for infor- • Learning about the law or the form 2 hr.
mation about yourself, we must irst tell you our legal right to • Preparing the form 1 hr., 30 min.
ask for the information, why we are asking for it, and how it
will be used. We must also tell you what could happen if you • Copying, assembling, and sending the form
do not provide it and whether or not you must respond under to the IRS 85 min.
the law. Routine uses of this information include giving it to the
Department of Justice for civil and criminal litigation, and
We ask for the information on this form to carry out the to cities, states, the District of Columbia, and United States
Internal Revenue laws of the United States. This information commonwealths and possessions for use in administering
requested on this form is needed to process your applica- their tax laws. Advisory may contact you, your representa-
tion and to determine whether the federal tax lien can be tive, or any person relative to the transaction for additional
discharged. You are not required to apply for discharge; information. We may also disclose this information to other
however, if you want the federal tax lien to be discharged, countries under a tax treaty, to federal and state agencies
you are required to provide the information requested on this to enforce federal nontax criminal laws, or to federal law
form. Section 6109 requires you to provide the requested enforcement and intelligence agencies to combat terrorism.
identiication numbers. Failure to provide this information

Publication 784 (Rev. 6-2010) Catalog Number 46756T Department of the Treasury Internal Revenue Services www.irs.gov

- 5 -

                                   Department of the Treasury — Internal Revenue Service 
                                                                                                                       OMB No. 1545-2174
Form 14134            Application for Certificate of Subordination of
(June 2010) 
                                                 Federal Tax Lien 
Complete the entire application.  Enter NA (not applicable), when appropriate.  Attachments and exhibits should be included as 
necessary.  Additional information may be requested to clarify the details of the transaction(s). 
1. Taxpayer Information (Individual or Business named on the notice of lien) 
Name (Individual First, Middle Initial, Last) or (Business) as it appears on lien                 Primary Social Security Number 
                                                                                                  (last 4 digits only) 
Name Continuation (Individual First, Middle Initial, Last) or (Business d/b/a)                    Secondary Social Security Number 
                                                                                                  (last 4 digits only) 
Address (Number, Street, P.O. Box)                                                                Employer Identification Number 

City                                             State                                            ZIP Code 

Telephone Number (with area code)                Fax Number (with area code) 

2. Applicant Information                         Check if also the Taxpayer (If not the taxpayer, attach copy of lien. See Sec.10) 
Name (First, Middle Initial, Last)                                                Relationship to taxpayer 

Address (Number, Street, P.O. Box) 

City                                             State                                            ZIP Code 

Telephone Number (with area code)                Fax Number (with area code) 

3. Property Owner                                                                            Check if also the Applicant 
                                                                                  Relationship to Taxpayer 

4. Attorney/Representative Information           Attached:  Form 8821 or                     Yes  No
                                                 Power of Attorney Form 2848 
Name (First, Middle Initial, Last)                                                Interest Represented (e.g. taxpayer, lender, etc.) 

Address (Number, Street, P.O. Box) 

City                                             State                                            ZIP Code 

Telephone Number (with area code)                Fax Number (with area code) 

5. Lending/Finance Company 
Company Name                                     Contact Name                                     Contact Phone Number 

Type of transaction (For example, loan consolidation, refinance, etc) 

Catalog Number 54726H                                        www.irs.gov                          Form 14134 (Rev. 06-2010)

- 6 -

                                                                                                                  Page 2 of 3 
6. Monetary Information 

Amount of existing loan (if refinancing) 

Amount of new loan 

Amount to be paid to the United States (6325(d)(1) applications only) 

7. Basis for Subordination: Check the box below that best addresses what you would like the United States to consider 
in your application for subordination. (Publication 784 has additional descriptions of the Internal Revenue Code sections listed 
below.) 

6325(d)(1)            the United States will receive an amount equal to the lien or interest to which the certificate of 
                      subordination is issued (provide amount in Section 6 above) 

6325(d)(2)            the issuance of the certificate of subordination will increase the government's interest and make 
                      collection of the tax liability easier. (Complete and attach a signed and dated statement describing how 
                      the amount the United States may ultimately realize will increase and how collection will be facilitated by 
                      the subordination.) 

                      Statement    Attached  NA 

8. Description of property (For example, 3 bedroom rental house;  2002 Cessna twin engine airplane, serial number 
AT919000000000X00; etc.): 

Address of real property (If this is personal property list the address where the property is located): 
Address (Number, Street, P.O. Box) 

City                                         State                                ZIP Code 

Real Estate: 
Legible copy of deed or title showing legal description                           Attached NA 

9. Appraisal and Valuations 
Appraisal: (Professional appraisal completed by a disinterested                   Attached 
           third party but it is not required for a subordination) 

OR ONE OF THE FOLLOWING VALUATIONS: 
County valuation of property (real property)                                      Attached 
Informal valuation of property by disinterested third party                       Attached 
Proposed selling price (for property being sold at auction)                       Attached 
Other:                                                                            Attached 

Catalog Number 54726H                                         www.irs.gov                  Form 14134 (Rev. 06-2010)

- 7 -

                                                                                                           Page 3 of 3 
10. Copy of Federal Tax Lien(s) (Complete if applicant and taxpayer differ)        Attached             No 
OR list the lien number(s) found near the top right corner on the lien document(s) (if known) 

11. Copy of the proposed loan agreement (if available)                             Attached             No 
AND 
Describe how subordination is in the best interests of the United States: 

12. Copy of a current title report (required for subordination)                    Attached             No 
OR 
List encumbrances with seniority over the Federal Tax Lien.  Include name and address of the holder; description of 
the encumbrance, e.g., mortgage, state lien, etc.; date of agreement; original loan amount and interest rate; amount 
due at time of application; and family relationship, if applicable. Include any home equity line of credit (HELOCs) 
advances beginning the 46th day after the NFTL was filed, through the date you submit your application, and include 
expected advances through the date the certificate will be issued. (Attach additional sheets as needed): 

13. Copy of proposed closing statement (aka HUD-1)                                 Attached             No 
OR 
Itemize all proposed costs, commissions, and expenses of any transfer or sale associated with property (Attach 
additional sheets as needed): 

14. Additional information that may have a bearing on this request, 
                                                                                   Yes Yes Yes No No No 
such as pending litigation, explanations of unusual situations, etc., 
is attached for consideration 

15. Declaration 
Under penalties of perjury, I declare that I have examined this application, including any accompanying schedules, 
exhibits, affidavits, and statements and to the best of my knowledge and belief it is true, correct and complete. 

                                   Signature/Title                                             Date 

                                   Signature/Title                                             Date 

Catalog Number 54726H                              www.irs.gov                                 Form 14134 (Rev. 06-2010)

PDF file checksum: 2604910145

(Plugin #1/7.24/11.3)