As a debt collector, the Internal Revenue Service is not an entity that you should avoid or ignore. Taxpayers who owe money to the IRS may find themselves hit with a lien on their assets for unpaid taxes. This can significantly inhibit your ability to obtain financing, sell a property, or otherwise carry out your financial affairs. Fortunately, there are some alternative solutions that may be available in these cases. One such alternative is to apply for a subordination of the federal tax lien to another debt.
Why the IRS Might Accept a Subordination of Tax Lien Request
In order to apply for a certificate of subordination, you must give the IRS a reason for why it should grant your request. The following are two reasons that the IRS may accept:
- The United States will receive an amount equal to the lien or interest to which the certificate of subordination is issued. In other words, you must pay an amount that equals the lien amount that is being subordinated. The IRS is receiving its full amount owed despite approving the subordination request.
- The issuance of the certificate of subordination will increase the government’s interest and make collection of the unpaid tax liability easier. Essentially, if it’s clear that the government will receive more money or be able to collect the money that it is owed with less effort, the IRS may grant a subordination of the tax lien. If you choose this option, you must complete and attach a signed and dated statement that describes how the amount that the United States may ultimately realize will increase. It also must describe how collection will be made easier because of the subordination.
Obtaining a subordination of your tax debt requires that your application be submitted with all of the necessary information. If you have never applied in the past, this can feel like an overwhelming process. Fortunately, we are here to assist you. We encourage you to reach out by calling our toll free number today at (800) 721-7054.