The Commissioner may issue a release of lien as to a part of the property subject to a tax lien, provided that the Commissioner is satisfied that such partial release will facilitate the collection of the outstanding tax liability. An application for a partial release shall be submitted to the Commissioner in writing and shall include the following:
(a) an identifying description, including address, of all real property subject to the lien, giving appropriate title references and the location and an identifying description of all personal property subject to the lien, including, where appropriate, the name of the manufacturer and model number of the item, the office in which any encumbrances on such property are recorded;
(b) the address and a full legal description of any real property sought to be released; and the location and a full identifying description, as in 830 CMR 62C.50.1(7)(a) of any personal property sought to be released;
(c) a statement of the fair market value of each property subject to the lien, including the property sought to be released;
(d) a statement of the reasons for which the taxpayer seeks the release;
(e) a statement of all encumbrances on the property, including the property sought to be released, and the dates of their recording, where applicable;
(f) a statement of the consideration offered by the taxpayer for the partial release; and,
(g) a copy of the notice of a tax lien.
In considering an application for a partial release of a lien, the Commissioner may require further evidence or documentation, such as a supporting appraisal of the property. As a general guideline, a partial release will not be issued unless the fair market value of the property which would remain subject to the tax lien after issuance of a partial release, is at least double the amount of the unsatisfied liability secured by the tax lien and of the amount of all other liens on the property which have priority to such tax lien.
Example:
Taxpayer T has an unsatisfied tax liability of $10,000, and three parcels of real estate subject to the lien: Whiteacre, Blackacre and Greenacre. The fair market value of Whiteacre is $20,000, but there is a mortgage of $10,000 (including interest) which is prior to the tax lien of Whiteacre. Blackacre has a fair market value of $10,000, but there is a mortgage of $3,000 (including interest) which is prior to Blackacre. Greenacre has a fair market value of $5,000, and is unencumbered except for the tax lien. T seeks a partial release of the lien, to free Greenacre for sale. T offers the Commissioner $5,000 as consideration for such partial release, which would reduce his unpaid tax liability to $5,000. If the partial release were issued, the fair market value of the property remaining subject to the lien would be $30,000. However, the prior liens and the unsatisfied tax liability total $18,000. Since the fair market value of the property remaining subject to the lien is not at least double this total, the application fails to meet the criterion, and would not be likely to be granted.
A release of lien as to a part of the property subject to the tax lien of the Commonwealth may be issued, if such part is sold at a foreclosure sale, and, a written agreement is made with the Commissioner by the parties in interest which provides that the proceeds be held as a fund subject to the liens and interests which attached to the property to be released. The liens and interests shall have the same order and priority with respect to the proceeds of sale as they had with respect to the property. In order for the provisions of this paragraph to apply, the sale must divest the taxpayer of all rights, title and interest in the property sought to be released.
In appropriate circumstances, the Commissioner may certify that the tax lien as to some part of the property subject to the tax lien is subordinate to a lien or interest held by another party, if there is paid to the Commissioner an amount equal to the amount of the lien or interest to which the tax lien is made subordinate. If the certificate of subordination is to be issued before such amount is paid over to the Commissioner, a separate escrow account must be established in full amount, to secure the tax lien.
If, after issuance of a partial release or certificate of subordination, the taxpayer reacquires any interest in the property for which such certificate was obtained, the lien will again attach to such property.