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I have a IRS lien on my home, I am in the process of doing

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a short sale what do...
I have a IRS lien on my home, I am in the process of doing a short sale what do I need to do???
Submitted: 5 years ago.Category: Tax
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Answered in 51 minutes by:
5/1/2012
Tax Professional: Jax Tax, Tax Attorney replied 5 years ago
Jax Tax
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1,408
Experience: JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
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In order for the short sale to close, you must obtain a discharge of property from tax lien from the IRS. Form 14135 mist be completed and submitted to the IRS. A few things must be included. The prelim HUD or closing statement, a current apprasial, and the distribution of all funds if not on the HUD. You will need to ensure the buyer and the buyer's finance company are willing to push closing back at least 45-60 from the date the request is mailed. There is no way by which to expedite the process and the closing cannot happen without it.
The only other option is to full pay the tax owed. Not the amount on the lien bit the current balance.

There is one last option but it takes longer than the two above and requires the debt be less than $25k, you to be in a payment arrangement that full pays within 60 months by direct debit from your bank account.

The big problem is going to be the time needed as the buyer's lender and underwriter have likely not guaranteed the loan that far out. The request for discharge is specific to the current buyer. If a new buyer comes in, a new request must be submitted.
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Customer reply replied 5 years ago
need to know, when does the forgiveness of debt take place?? When the home is place in foreclosure or after its sold in foreclosure.
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago
Robin D.
Robin D., Senior Tax Advisor 4
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Hello

Florida is a non-recourse state. So the lender can either pursue the remaining balance or they can forgive the debt. They may decide to wait till after the sale to forgive the debt if the decide they will not be able to receive the remaining balance from the homeowner.

 

Robin D.
Robin D., Senior Tax Advisor 4
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