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IRS Won't Freeze Owners Who Risk Losing Their Home

Internal Revenue Office will postpone “holding” the properties of owners in arrears so that they are able to sell or refinance them.

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Homeowners who are at the brink of losing them may refinance or sell them without fearing that the IRS will freeze them for their federal tax debts.

“The government understands the difficult times that some families that are about to lose their homes are going through, and thus my department will speed up the processes preventing the refinancing of mortgages or sale of homes making federal tax debts “secondary”, said Internal Revenue Service Commissioner, Doug Shulman.

“There are over one million in federal tax debts by owners whose hands are tied because they are unable to do anything to salve their mortgages.  Therefore, we have decided to postpone those taxes, but this does not mean that the debts will be forgiven but rather that owners will be granted more flexibility to that they don’t lose their home or the money they invested”.

“The IRS is prepared to receive any number of owners that fill out the applications and require banks or purchasers not to inherit the property withholding when the time comes to purchase it or provide money for refinancing”.

When a person fills out the application to “momentarily suspend the debt”, he/she will not have to wait for a month. Things will begin when the processed form is received.

The IRS pointed out to those owning taxes or seeking deductions that fire insurance, domestic help wages, depreciation, gas, power, water, deposits, earnings and deferred payments cannot be deducted.

It is the right to preserve or sell a property belonging to someone that is endebted.  Many times the property is sold to pay the debt or is withheld as a guarantee until the debt has been paid.  There are many financial institutions that use this right to get back the money they are owned, but they are not the only ones, since the federal government uses withholdings if taxes are due. The downside is that when the government decides to use this right on property, the owner has no alternative but to pay the debt since the IRS is only interested in recovering the money and because of this at times sells them in auctions.  

 Joe Muñoz, IRS spokesperson, dispelled some doubts:

How do the owners benefit?

People that are unable to pay for their homes and the debt to the IRS, with the acceleration of the Homeowners Tax Relief, may refinance them at a price they are able to pay each month instead of the original price.  It is important to underline that not all people qualify for this benefit; only those that have followed the complete process and that have been accepted.  Those that qualify, first of all, receive a letter from our office stating that they owe a certain sum and the term and conditions to pay such sum.  The person has the right to refute the accusations and demonstrate that there is a mistake, but if despite this he/she still owes us money, such person may receive relief benefits so that our debt is considered secondary.

Is their help for those who cannot pay?

Of course.  We can offer a payment plan; wait with regard to collections; or the payment process can be adjusted.  But remember that not only do individuals lose their homes; businesspersons can lose the building where they have established their businesses.  We want people to remember that we don’t care about their immigration status with regard to receiving this benefit. 

What if they do not pay?

They are penalized for negligence when declaring or late declaration, in addition to interest charges and losing their reimbursement since they cannot receive it if they do not submit a tax declaration.  To obtain a tax relief application, visit www.irs.gov or call the Spanish Service Center at 1 800 829 4933.

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