Last week’s blog was an overview on IRS tax liens. You can link to it here.

This week’s blog will go into detail about one of the options available to taxpayers to get around a tax lien. This option is known as subordination.

My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By the Book Taxes also helps clients resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications.

Subordination occurs when the IRS allows another secured lender or creditor to “move ahead” of it in priority if doing so will increase the IRS’ ability to collect taxes owed.

A good example of subordination is when a taxpayer wishes to refinance an existing mortgage to a lower interest rate which will increase the amount of money that the taxpayer has available each month to pay the IRS.

After submitting all loan application backup, the IRS will allow the mortgage lender to “move ahead” in order to complete the refinance and thereby facilitate the taxpayer’s higher monthly tax payments.

If you have years of unfiled tax returns or owe the back taxes, please call me. I can help.