Tax Lien Subordination
What is a Tax Lien?
What is Tax Lien Subordination?
Tax Lien Subordination does not remove a federal tax lien on a property however, it gives a creditor the opportunity to move ahead of the IRS, meaning that that creditor has prioritized interest to your assets, ahead of the IRS. This makes it easier to receive a loan, mortgage or refinance a house.
When and Why Should I Apply for Tax Lien Subordination?
You should apply for Tax Lien Subordination if you are hoping to refinance your home, apply for a loan or hoping to be approved for a mortgage. It is best practice to apply for tax lien subordination at least a few months before you start to apply for a loan, mortgage or refinancing.
Typically, in the situation of a tax lien, the IRS has first priority to your assets thus it is difficult to receive any form of credit as creditors are low on the list of those with access to your assets, making you an undesirable constituent. When you are approved for a Certificate of Subordination it makes it easier to receive credit as the creditor becomes a top priority for your assets. Visit our IRS tax resolution services page for more info.
How Can I Become Eligible for Tax Lien Subordination?
In order to be eligible for Tax Lien Subordination you must prove that you have a basis for subordination. You must provide the IRS with proof that giving up their property (the lien against your property) would allow you to repay your debt.
According to the IRS, these are basis for subordination: