IRS Tax Debt Relief – Finding A Solution
Filed under IRS Debt Relief
For the many American homeowners who have found themselves in need of help paying their mortgages over the past few years, the IRS tax debt relief act has been an amazing windfall. When the economy began to head south and all the adjustable rate mortgages began to adjust, millions of homeowners found themselves facing a real hardship and many of them were at risk of losing their homes.
Many lenders were losing a ton of money because homeowners couldn’t pay their bills, but late in 2007 the legislatures passed what is called the IRS Debt Relief Act. This is also known as the Mortgage Forgiveness Debt Relief Act, and what it does for people is offer dramatic help to them.
Choice For Homeowners
There was help to homeowners who couldn’t afford to pay their mortgages but wanted to keep their homes, but it would come at a cost, which for many homeowners, was just too much to have to pay. For many, it became a choice of keeping your home, but owing money you couldn’t afford on your taxes or losing your home, but not owing the extra money in taxes that you couldn’t pay. This was causing problems for lenders as well as borrowers, because it was forcing many homeowners to walk away from their homes because they felt they had no other choice. The IRS tax debt relief has offered many people a choice they didn’t have before.
In the past, when a lender helped a homeowner by forgiving some of the late payments they owed or offered lower interest rate refinancing, the homeowner would be taxed on the money they saved. The government considered this money to count as income, but it was only serving to hurt homeowners who didn’t have any money to begin with. The IRS tax debt relief act was meant to help with this problem by no longer counting money that was saved through lender help on mortgages counted as income.
Homeowners who have had payments forgiven or their mortgage refinanced still need to know that they have to report it to the government. The Form 982 is used when processing this information. Also, homeowners should know that there are times when the IRS tax debt relief act will not apply to them, such as when they have payments forgiven on a second home or if the amount forgiven is more than the original debt.
For many homeowners who have exercised this option, the IRS tax debt relief will likely apply, especially if the homeowner finds that they are upside down on their home. It’s important to keep your eye open for this opportunity when your are doing your taxes and mention it to your tax preparer if you have one so that you don’t miss out on this opportunity to save some money on your taxes.
Related posts:
