Help for the distressed homeowners started with the 2009 tax filing season. These three options take away the previously inflexibility of the IRS as far as negotiation with homeowners. IF you qualify for one or more of these you could obtain serious tax relief from the IRS. See what I mean? Hopefully as diligent Realtors we are advising our clients to seek the services of a CPA, tax attorney, etc, before making decisions that could affect their property and liability, as this sounds hopeful for many.
"Internal Revenue Service News Release (January 6, 2009) The Internal Revenue Service today kicked off the 2009 tax filing season by announcing a number of new steps to help financially distressed taxpayers maximize their refunds and speed payments while providing additional help to people struggling to meet their tax obligations. Among the areas where the IRS can provide assistance:
Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay. This includes instances when the taxpayer has recently lost a job, is relying solely on Social Security or welfare income or is facing devastating illness or significant medical bills. If an individual has recently encountered this type of financial problem, IRS assistors may be able to suspend collection without documentation to minimize burden on the taxpayer. (Personally I have clients that have received this benefit...so it's worth the time and trouble to send in your documentation if you fit this criteria for postponement.)
Added Flexibility for Missed Payments: The IRS is allowing more flexibility for previously compliant individuals in existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship. The IRS may allow a skipped payment or a reduced monthly payment amount without automatically suspending the Installment Agreement. Taxpayers in a difficult financial situation should contact the IRS. (Personally I know people who have exercised this option as well, with no berating or negativity on the phone by the IRS, they are a kinder, gentler government agency these days.)
Additional Review for Offers in Compromise on Home Values: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than the full amount owed, may be a viable option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. (This can be a huge benefit to taxpayers who made lots of money in previous years and didn't have the cash left to pay the tax. Realtors, loan agents, independent contractors and others on commission income are being assisted with this provision.)
The NEW Kinder, gentler IRS is doing it's part to ease the burdens this economy has thrust upon us. Hopefully none of you need this assistance, but it's nice to know it's here for you or any of your clients that could benefit from the provisions. There are more, so check out the IRS website...for details. http://www.irs.gov/newsroom/article/0,,id=202244,00.html