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Federal Tax Lien Collection Actions in Detail (Part VII)

Federal Tax Lien Collection Actions in Detail (Part VII)

How to make the Federal Tax Lien secondary to other creditors (“subordination”) ?

A “subordination” is where a creditor is allowed to move ahead of the government’s priority position. For example, if you’re trying to refinance a mortgage on your home, but aren’t able to because the federal tax lien has priority over the new mortgage, you may request that the IRS subordinate their lien to the new mortgage. For more information on whether you qualify for a subordination, see Publication 784, How to Prepare an Application for a Certificate of Subordination of Federal Tax Lien. To watch an instructional video about Publication 784, visit www. irsvideos.gov/Individual/IRSLiens.

Appeal rights for withdrawal, discharge or subordination

If your application is denied you will receive Form 9423, Collection Appeal Request and Publication 1660, Collection Appeal Rights, with an explanation of why your application was denied. If the IRS denies your request for a withdrawal, discharge, or subordination, you may appeal under the Collections Appeals Program.

Next week: Federal Tax Levy Collection Actions in Detail

(IRS Publication 594 and IRS.gov) (TTT 03/17/2020)