Are you considering a short sale or a loan modification only to be shackled by the IRS? If so, you might finally be getting a break. The IRS is launching a program that will give everyday homeowners some relief. Believe it or not the Internal Revenue Service announced earlier this month that they would try to make it easier for distressed homeowners to refinance or sell their homes.
IRS Commissioner, Doug Shulman, announced the plan and as I listened to the announcement, my jaw dropped. Since when has the IRS become a friend to its citizens? Listen up because you may never see something like this again.
Distressed homeowners may request that a federal tax lien be made secondary to liens made by the lending institution that will be refinancing or restructuring a home mortgage. This is a big deal, folks.
In addition, taxpayers who are seeking a short sale, one where the property is worth less than what is owed, may ask the IRS to completely discharge it's claim to a property in question. Can you believe this?
Said Shulman,"We don't want the IRS to be a barrier to people saving or selling their home." Huh? That's right, the IRS is now your friend.
Shulman indicated that the new program would focus on individuals who normally pay their taxes in full, but because of "extraordinary times, are getting behind on their tax payments."
You might know that a tax lien is a legal claim clouding title on property whereby the property owner owes taxes. Being in second place, behind another lien is called a subordinate position. In all the years I've dealt in real estate I've never seen a case where the IRS has voluntarily taken a second or subordinate position. They are always first in line with their hand out.
The thinking, which I applaud, is that by letting a homeowner sell their property, a tax bill will eventually get paid with some of the proceeds from the sale. A little bit is better than nothing. Right? This new type of thinking is just what we need in these drastic economic times. Why can't the rest of the government get on board and get with the program?
