Do You Have Tax Debt & You Are Looking To Buy A New Home?

We all know that with the rising issues with the economy and the number of declined loans, it is becoming increasingly harder to purchase a home these days. Not to mention if you are in tax debt, there are implied liens placed on your property until that lien has been satisfied.


Recently I have been asked to supply mortgage lenders with a letter declaring that the lien has been satisfied because the debt was paid in full. At this time, the mortgage lenders will not grant a loan to a taxpayer until they know that there is no liens attached to the properties.

On the flip side, if you are selling your home, you will need to apply for a loan discharge. You do not want to purchase a property with a lien attached to it. This is particularly why title searches are ran before a homeowner makes the final decision.


Discharge of a Federal Tax Lien :


If you are giving up ownership of property, such as when you sell your home, you may apply for a Certificate of Discharge. Each application for a discharge of a tax lien releases the effects of the lien against one piece of property. Note that when certain conditions exist, a third party may also request a Certificate of Discharge. If you're selling your primary residence, you may apply for a taxpayer relocation expense allowance.



Withdrawing Liens
By law, a filed notice of tax lien can be withdrawn if:
*The notice was filed too soon or not according to IRS procedures,
*You entered into an installment agreement to pay the debt on the notice of lien (unless the agreement provides otherwise),
*Withdrawal will speed collecting the tax, or
*Withdrawal would be in your best interest (as determined by the Taxpayer Advocate), and in the best interest of the government.



If you have tax debt, and you need someone to help get you in a resolution so that you can move forward with the purchase of a new home, don't hesitate to call a tax professional today.