The Internal Revenue Service (IRS) has unveiled an expedited process designed to make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.
Taxpayers – or their representatives, such as their lenders – may request that the IRS make a tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan. Taxpayers or their representatives may 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 says.
The process to request a discharge or a subordination of a tax lien takes approximately 30 days after the submission of the completed application, but the IRS will work to speed those requests in wake of the economic downturn.
‘We don't want the IRS to be a barrier to people saving or selling their homes,’ says Doug Shulman, IRS commissioner. ‘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.’
Source: Internal Revenue Service