My goal in cleaning up my credit and improving the score is to be able to purchase a home in the next year. I did a BK (ch7) 18 months ago and got most of my state/fed taxes discharged. In fact, the BK was not about CC debt, had no late pays. I am now working on getting the liens either deleted or updated "released" on my CR. There is one year I will be fighting the IRS over, may take a while, on a technicality. The amount is $100k. As I read more about mortgages and qualifying, I keep hearing/seeing about having no outstanding collections/liens. This could be a problem for me - as I battle the IRS, and this could take years, am I excluded from purchasing property? BTW, the liens before were not against any property I had, just the machine firing up in some useless way. Also, I'm not sure if there is an outstanding lien for that particular year. IOW, it might look like the liens have been released but I'll still be fighting over one particular year for a while. Thanks in advance - this board is great!
It was my understanding years ago that open IRS liens were deal killers. The theory being, you buy the house, the IRS grabs it and sells it and takes all the money. IRS liens come first, so the mortgage company would be left out in the cold.
Not true - IRS liens are always subordinate to Purchase Money Mortgages. I would sugest the original poster consult with either an Enrolled Agent or CPA concerning the advisability of making an Offer in Compromise to get rid of the 100K tax debt. Make sre whoever you consult knows OIC's because the OIC offices (Memphis and Holtsville) are so geared to rejecting Offers if not put forward properly taht at last count Memphis was accepting only about 5% of OIC's proposed.
please excuse my ignorance, but a lien is a legal judgement, right? A lien is NOT an installment or payment plan to pay off income taxes for the past few years, right? just making sure ... peace, delilah
Re: does an IRS lien mean no mortga Nope. It's about my marriage and making a boneheaded decision... I guess that's redundant.
Re: Re: does an IRS lien mean no mo Nice idea, but it didn't work. OIC first by me, rejected, appealed then sought a CPA who advised the BK. OIC won't help me much now, but I've got a decent chance fighting and appealing. It's about a super technicality, won't bore everyone here.
Re: Re: does an IRS lien mean no mortgage? Wow. Thanks for clearing that up. So, when properties are auctioned for unpaid taxes - mortgage company gets paid first?
Re: Re: does an IRS lien mean no mortgage? I just OIC'd (new york brand) $45K down to $8K offer accepted on first try. Both the lawyer and I were sorta kidding when i came up with 8K amount. What was shocking was the letter a month later requesting payment in 90 days. Needless to say i paid it. Nothing bad has ever been put on my reports, nor will it be (next day air check for $8k to the divison). Don't lie on loans n stuff. They pulled experian to check your shiz, btw,so don't lie. I have a big phat HARD from INTERNAL REVENUE SERVICE. This was due to my wife not disclosing 1099's (ex-wife) during our separation period. The IRS doesn't care since we filed jointly they go after whoever has money (the man) versus who doesn't. lol. Lovely system. but paying 1/6th of the true amount owed was certainly easily to fathom. The payment place wanted like $500/month for 8 years or some crazy schtuff, with a lien on credit report for those 8 years, then time to withdraw it. Needless to say, i'd rather eat 8 grand now than suffer crap credit and crap payments for 8 years (interest on payment). OIC's work pretty good, just make sure you follow their guidelines on spending to a TEE.
Re: Re: Re: does an IRS lien mean no mo Sorr, but I am an EA and I do a lot of OIC's. Why was it rejected? I probably know - COIC centers are only accepting about 5% of OIC's because the clerks working them are BONE-HEADS. Bore me with the technicalities, I may be able to poiint you in the right direction. And that's why I suggested you talk witha CPA or an EA "who is familiar with OIC's"
Re: Re: Re: Re: does an IRS lien me It was rejected because I did it myself with a revenue officer's help. Took years to get rejected and then appeal. My finances had gotten better, I was previously "uncollectable". Took it to a CPA who knows his stuff, said the OIC would take a while and I'd pay a lot more (the total was like $500k) and the BK cleared everything but one year on a super technicality - they filed for me and claim they never received my real - AKA amended - return. I sent two years at the same time and they got the other year. It's worth fighting because it's so damn close. And I've been a good doobie about filing and paying for the last five years, not going back there again. This fight has been expected for and I expect it will go on for quite a few years if I appeal. I'll get the kids through college and then if I'm still on the hook, I won't care anymore.
Re: Re: Re: does an IRS lien mean no mortgage? When properties get auctioned for unpaid taxes, it's unpaid property taxes, which are superior. IRS tax liens are different.
Re: Re: Re: does an IRS lien mean no mortgage? IRS liens are a deal killer. 1. A federal tax lien attaches to all property that you own at the time the lien is created. These liens are then recorded to put the world on notice that the property is encumbered. The fancy legal term for this recording is "perfecting the lien." It attaches to property you have when it is created and has important implications for mortgage financing because it also attaches to any property that you acquire later. The lien expires after 10 years unless the IRS renews it within that time or obtains a court judgment against the taxpayer or more accurately the non-taxpayer. 2. When there are multiple security interests in real property (these include mortgages, deeds of trust, judgment liens, tax liens or anything else that involves an obligation to pay money) the first one to be recorded is senior to all others and the rest are ranked in the order in which they were recorded. 3. The order in which the security interests were recorded becomes important in the event of a foreclosure. Say there are three lienholders, A, B, and C. A is the senior, B is junior to A, and C is junior to A and B. If A begins foreclosure, either B or C would have to step in to cure the default. Otherwise, the property is sold free and clear of B and C's lien. Similarly, if B forecloses, C would have to step in to protect its interest but A wouldn't have to do anything. 4. Since the IRS lien pre-dates the mortgage that you are looking for, the IRS is "A" in this scenario and your lender will not want to its interest to be subordinated to the IRS. Therefore, no mortgage unless you pay the lien in full, get an offer in compromise accepted or wait out the 10 years hoping that the IRS forgets to renew it.
Re: Re: Re: Re: does an IRS lien mean no mortgage? Thanks for clearing that up. Slapping my head -- DUH! jlynn
