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In essence, federal tax lien subordination means the IRS is giving up its priority on your property so you can get a loan, mortgage, or other financing. With tax lien subordination, the IRS tax lien remains on your property, but it will be a lower priority than the financial interest of new lenders.
If there is a federal tax lien on your home, you must satisfy the lien before you can sell or refinance your home.
Apply for a certificate of subordination of federal tax lien by following the instructions in Publication 784. You will need to complete Form 14134. It is also a smart idea to watch this self-help IRS video. It is important to apply at least 45 days before a loan settlement meeting.
The normal processing time for a Subordination may be as long as 30 to 60 days. However, when there is danger of losing the loan, the IRS may expedite the certificate at the taxpayer's or representative's request.