When an IRS tax lien is standing between you and a financial transaction you need to complete, there are two important legal tools that a tax lien lawyer can use to help you move forward even before the underlying debt is fully resolved. Lien discharge and lien subordination are both legitimate IRS processes that can unlock property sales, refinancing, and business financing that would otherwise be blocked by an existing federal tax lien.
D Tax Solutions provides expertise in both of these processes as part of their comprehensive lien resolution services. Their team has the procedural knowledge needed to apply for discharge and subordination correctly, coordinate with the IRS on timing, and ensure that these arrangements serve the client's overall resolution strategy.
What Is a Federal Tax Lien Discharge?
A federal tax lien discharge removes the IRS's lien from a specific piece of property while leaving the lien in place on the taxpayer's other assets. This allows a specific property to be sold or transferred without the lien following it, while the overall tax debt and the lien's attachment to other assets continues until resolved.
Discharge applications require demonstrating to the IRS that either the property being discharged has value exceeding the amount of the lien, leaving the government's interest fully secured by the remaining assets, or that the proceeds from the sale will be applied to the tax debt. D Tax Solutions prepares and submits discharge applications, coordinates with title companies and closing agents on timing, and manages all IRS communications throughout the process.
What Is Federal Tax Lien Subordination?
Lien subordination is different from discharge. Subordination doesn't remove the lien from a property. Instead, it moves the IRS's priority claim behind another creditor's interest, typically a mortgage lender. This allows a taxpayer to refinance a mortgage even with an existing IRS lien by giving the lender a senior position that they require to approve the loan.
Subordination requires demonstrating to the IRS that the refinancing will either facilitate payment of the tax debt or will not harm the government's overall financial interest. D Tax Solutions builds the case for subordination approval using the client's property values, mortgage amounts, and tax liability figures, presenting the analysis in the format the IRS expects to see in a subordination application.
Engaging a qualified tax lien lawyer who understands the technical requirements of both discharge and subordination applications gives clients access to financial options that most people with IRS liens don't even know exist. D Tax Solutions regularly helps clients complete property transactions and secure refinancing that would otherwise have been blocked by their IRS lien.
How Long Does the Discharge or Subordination Process Take?
The IRS typically requires 45 days to process a lien discharge or subordination application, though this timeline can vary based on the complexity of the application and the IRS's current processing volume. D Tax Solutions manages these applications with attention to timing, coordinating with clients on pending transactions to ensure applications are submitted with sufficient lead time before closing or loan approval deadlines.
When expedited processing is needed due to an imminent transaction deadline, D Tax Solutions knows the appropriate IRS channels for requesting prioritized review and how to present the urgency of the timeline in a way that's most likely to receive a favorable response.
Combining Lien Relief With Overall Tax Resolution
Lien discharge or subordination is most valuable as part of a broader tax resolution strategy rather than as a standalone solution. Completing a property sale with lien discharge might generate proceeds that fund an Offer in Compromise. Refinancing through lien subordination might provide monthly cash flow that makes an installment agreement viable. D Tax Solutions integrates these lien relief tools into the overall resolution plan so that each step supports the others.
This integrated approach is what makes working with a full-service tax resolution firm fundamentally different from trying to address each IRS issue separately. D Tax Solutions sees the full picture of each client's financial situation and coordinates every element of the resolution strategy accordingly.
What Happens to the Lien After the Debt Is Resolved?
When the underlying tax debt is fully resolved through payment, Offer in Compromise acceptance, or statute expiration, the IRS is required to release the tax lien within 30 days. D Tax Solutions follows up to ensure this release actually happens on schedule and pursues lien withdrawal, rather than just release, whenever the qualifying criteria are met. Withdrawal has a more favorable impact on credit records and eliminates the public filing more completely than a simple release.
For clients who resolved their debt but never had the lien formally released or withdrawn, D Tax Solutions can also pursue these actions retroactively, cleaning up the credit record even for debts that were paid some time ago.
Conclusion
IRS tax liens create real financial obstacles, but those obstacles have solutions. A knowledgeable tax lien lawyer from D Tax Solutions knows how to use every available IRS procedure, including discharge, subordination, withdrawal, and release, to remove the barriers an IRS lien creates and restore your full financial freedom. Call 888-578-9568 for a free consultation and find out which lien relief tools apply to your specific situation.
FAQs
Q: Can I get a lien discharged for a property I want to sell but the sale price is less than the lien amount? A: In some cases yes, particularly if applying the sale proceeds toward the debt reduces the overall liability sufficiently. D Tax Solutions evaluates discharge eligibility based on the specific transaction details.
Q: Will lien subordination let me refinance even if I owe a large amount to the IRS? A: Subordination approval depends on demonstrating that the refinancing doesn't harm the government's financial interest. D Tax Solutions builds the financial analysis needed to support the subordination application.
Q: How do I know if my IRS lien has already been released? A: IRS lien status can be checked through the county recorder's office where the lien was filed. D Tax Solutions can verify the status and take action if a lien should have been released but wasn't.