IRS Form 1114: Post a Bond to Release a Federal Tax Lien

IRS Form 1114 is the application you file to have a federal tax lien released after posting a bond that guarantees payment of what you owe. It runs on the authority of 26 USC 6325(a)(2), which requires the IRS to release a lien once it accepts a bond covering the assessed liability plus interest that will accrue through the payment deadline.¹ The bond takes the place of the lien as the government’s security, and once the IRS accepts it, a Certificate of Release goes on record in the same office where the lien was filed.

When Posting a Bond Is the Right Move

This path fits taxpayers who need a lien off their title to close a real estate sale, complete a refinance, or clear another legitimate financial transaction, but who don’t have the cash on hand to pay the balance in full. The bond does not reduce or settle the tax debt. You still owe every dollar of tax, interest, and penalties. What changes is the government’s security: it looks to the bond and the surety instead of tying up your property. If you eventually default, the surety pays the IRS and then pursues you for reimbursement.

Because the bond substitutes for the lien rather than resolving the underlying liability, it is not the right tool if your real complaint is that the lien should never have been filed. It is the right tool when the liability is valid, you accept it, and you need your property freed so you can transact.

What You Can Post as Security

Most applicants use a corporate surety bond, but 26 CFR 301.7101-1 recognizes several forms of acceptable security:²

A surety company holding a certificate of authority from the Treasury Secretary and listed on Department of the Treasury Circular 570.³
U.S. government bonds or notes pledged as collateral.
A cashier’s or certified check drawn on a bank incorporated under U.S. or state law.
A mortgage on real or personal property, accepted by the IRS in place of a surety bond.
Corporate bonds or stocks of recognized stability, including bonds issued by a state or political subdivision.
Two or more individual sureties. Each must reside in the same state as the taxpayer, own unencumbered property worth at least the full bond amount, and agree not to encumber pledged property without IRS permission.

The surety company route needs the least upfront capital because you pay a premium instead of posting the full face amount yourself. The premium depends on your creditworthiness, the size of the debt, and the surety’s risk assessment. Expect premiums to run several percent of the bond face value, and know that an existing tax lien on your credit profile can push that rate significantly higher. The Circular 570 route is also the smoothest procedurally, because a company already on that list needs no additional IRS approval of its qualifications.

Filling Out Form 1114

To complete Form 1114 accurately, you need information from both the filed Notice of Federal Tax Lien and your current IRS account transcripts. The core data points are:

Your full legal name and Social Security number or employer identification number, matching exactly what appears on the lien notice.
The serial number and recording date from the Notice of Federal Tax Lien.
Each tax period covered by the lien, the type of tax for each period, and the corresponding assessment dates.
The current unpaid balance for each tax period, pulled from your most recent IRS transcript. These figures must match exactly, because discrepancies will stall the process.
A specific description of any real property or other assets currently encumbered by the lien.

The bond amount must cover the total assessed liability plus all interest that will accrue through the payment deadline written into the bond.¹ If multiple tax periods are involved, each one needs its own line with its own assessment date and balance. The Internal Revenue Manual requires the bond’s payment deadline to fall no later than six months before the collection statute expires, giving the IRS a cushion to act if payment does not come through.⁴

Both you and the authorized representative of the surety company must sign the completed form. If you are using individual sureties instead of a surety company, each surety must sign and provide supporting documentation of their property holdings.

Where to Send It and What Happens Next

Send the application to the revenue officer assigned to your case if you have one. If no revenue officer is assigned, direct it to the IRS Advisory Consolidated Receipts group.⁵ Advisory personnel review the bond documentation, verify the surety’s authority, and confirm the bond amount covers the full liability plus projected interest.

If Advisory needs additional information, it should contact you within 21 calendar days of receiving your package.⁵ There is no published timeline for how long the full review takes before the bond is accepted or rejected. That depends on case complexity, the completeness of your application, and current Advisory workload. What the statute does guarantee is what happens after acceptance: once the IRS formally accepts the bond, it must issue a Certificate of Release within 30 calendar days.⁴

The Certificate of Release is Form 668(Z). The Centralized Lien Operation prints and mails release certificates, and they get filed in the same public recording office where the original lien notice was recorded.⁶ Once recorded, the lien no longer clouds your title. The bond stays in place until you satisfy the underlying tax debt or the collection period expires.

What You Still Owe After the Bond Is Accepted

The bond creates a three-way relationship. You remain the person who owes the tax. The surety acts as guarantor, promising to pay the IRS if you do not meet the terms. The IRS holds the bond as its security in place of the lien it released.

If you default on the payment terms, the IRS can demand payment directly from the surety for the full bond amount. The surety then has the right to pursue you for reimbursement of whatever it paid. That is true regardless of whether you have moved, changed jobs, or experienced a financial downturn. The surety’s obligation under the bond does not change based on your circumstances.

If a Full Bond Release Is Not the Right Fit

A bond-based release under Section 6325(a)(2) is not the only way to get a real estate deal done with a federal tax lien on record. Two other IRS mechanisms accomplish related goals without removing the lien entirely, and they often involve less upfront cost.

Discharge of Specific Property

A discharge removes the lien from one particular property while leaving it attached to your other assets. You apply using Form 14135, and the IRS evaluates whether releasing that specific property still leaves enough equity in your remaining assets to protect the government’s interest.⁷ This is the more common path for property sales where the proceeds won’t cover the full tax debt but the government’s interest in the property is less than the remaining equity elsewhere.

Subordination

A subordination does not remove the lien at all. It moves the federal tax lien behind a new loan, giving the new lender priority. This is useful when you need to refinance and the new lender will not close unless its mortgage takes priority over the IRS. You apply using Form 14134 and must show either that the IRS will receive an amount equal to the lien being subordinated, or that the subordination will actually improve the government’s ability to collect.⁸ If refinancing lowers your monthly payments enough to free up cash for an installment agreement, that is an argument the IRS may accept. Advisory and Insolvency Group Managers have the authority to approve or deny these requests.⁵

1
Office of the Law Revision Counsel. 26 USC 6325 – Release of Lien or Discharge of Property
2
eCFR. 26 CFR 301.7101-1 – Form of Bond and Security Required
3
Bureau of the Fiscal Service. Surety Bonds
4
Internal Revenue Service. Internal Revenue Manual 5.12.3 – Lien Release and Related Topics
5
Internal Revenue Service. Internal Revenue Manual 5.12.10 – Lien Related Certificates
6
Internal Revenue Service. Internal Revenue Manual 5.19.12 – Centralized Lien Operation
7
Internal Revenue Service. Application for Certificate of Discharge of Property from Federal Tax Lien
8
Internal Revenue Service. Application for Certificate of Subordination of Federal Tax Lien