The following article is taken from my C.A.R. (California Association of Realtors) Newletter and I thought it was very interesting as well as worthwhile to know. I recently posted some information about loan modifications as one of the emerging solutions to our current economic issues but never expected the government to offer the following relief - read on!
IRS TO EXPEDITE TAX LIEN RELIEF FOR HOMEOWNERS
The Internal Revenue Service (IRS) recently announced it will expedite its process of providing relief from federal tax liens for distressed homeowners. With more than one million current federal tax liens against real and personal property, the IRS announcement should help REALTORS® and their clients resolve federal tax lien issues in their sale and loan transactions.
As background, a homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don't have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS makes its tax lien subordinate, or secondary, to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS's processing time for subordination or discharge requests has been about 30 days. The IRS currently is working to expedite that time frame to help distressed homeowners. For IRS instructions on requesting relief from federal tax liens, go to IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.
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