We frequently represent clients who have a federal tax lien for outstanding IRS federal tax debt and can now obtain financing from a new creditor who insists the IRS subordinate its lien to their lien.
The IRS often agrees to a subordination, which means that it will agree, in writing, to allow another creditor to lend money to the taxpayer and have that lenders lien take priority over the existing IRS tax lien. Inn order to obtain a subordination, we make a written request with very specific information that demonstrates how the IRS’s ability to collect the old tax debt will be improved by agreeing to subordinate its federal tax lien for the new creditor.
· The proceeds loaned will be used to pay down the outstanding federal tax debt; and
· The proceeds loaned will help improve or rebuild an asset that can be used later to pay the IRS federal tax debt (this occurs when the taxpayer suffers a casualty loss, like a house fire, the bank will loan to rebuild the house, increasing its value and making it more attractive for the IRS)
When we handle these situations for taxpayers we are required to demonstrate why the subordination of the IRS tax lien will help the IRS collect the taxes owed.
We file a request with the IRS Lien Unit and provide supporting evidence. Often we can successfully obtain a subordination for the taxpayer. If this is unsuccessful we may consider filing an offer-in-compromise to resolve the tax issue and get the lien removed.
If you have any questions regarding federal tax liens in Hartford, Connecticut or any other area of Connecticut do not hesitate to contact me at (860) 657-9040 or by email at firstname.lastname@example.org.
Eric L. Green, LL.M.
Convicer, Percy & Green LLP
41 Hebron Avenue
Glastonbury, Connecticut 06033
Ph. (860) 657-9040
Fax (860) 657-9039