IRS Helps Speed Up Home Sales

1 01 2009

Amid harsh economic times, the Internal Revenue Service recently sped up the process to help financially strapped homeowners refinance or sell their homes – even if a federal tax lien is already in place.

The agency said there are options that would still allow the home to be sold, even if a federal tax lien has been filed. For example, the homeowner or their lender may request to have the IRS make the tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan.

Also, taxpayers or their representatives may request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien under certain circumstances.

While the process to request discharge or reorder a lien takes about 30 days after the paperwork is submitted, the federal agency said it “will work to speed those requests in wake of the economic downturn,” according to a press release.

The agency advises individuals to contact the Collection Advisory Group if they are in the process of selling or refinancing their home to expedite the process.

“People sometimes delay informing lenders of the tax liens, which only serves to delay the transaction,” according to the agency.

More than 1 million federal tax liens are outstanding against properties. The IRS issues more than 600,000 federal tax lien notices annually.

Source: IRS

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