The Internal Revenue Service recently announced a program to speed lien relief for homeowners trying to refinance or sell. While it won't get anyone out of their tax bill or erase a federal lien on their home, it's at least some help if they're trying to sell their home in this tough housing market.
Requesting the IRS to "discharge its claim" doesn't eliminate the lien, but moves it to a different property, such as a car or the taxpayer's wages. Somehow, the IRS will get its money.
The IRS is offering to speed up the process -- it usually takes about 30 days -- to make sure the sale or refinance is completed in a timely manner, and so no one gets kicked out of their home as a result of the lien, according to Marketwatch. Taxpayers can also request that the IRS make a tax lien secondary to the lien by the lender that is refinancing or restructuring a loan. They can also request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien under certain circumstances.
The IRS assesses tax liens on the property of taxpayers who haven't paid and haven't responded to requests for payment. The IRS reports that there are more than 1 million federal tax liens outstanding tied to both real and personal property. It issues more than 600,000 federal tax lien notices annually. A good way to avoid a lien is to contact the IRS if you can't pay your bill.
"We don't want the IRS to be a barrier to people saving or selling their homes," said Doug Shulman, IRS commissioner, in a press release. "We want to raise awareness of these lien options and to speed our decision-making process so people can refinance their mortgages or sell their homes."
"We realize these are difficult times for many Americans," Shulman said. "We will ensure we have the resources in place to resolve these issues quickly and homeowners can complete their transactions."
Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job hunt at www.talesofanunemployeddad.blogspot.com