HAVE A TAX DEBT AND SELLING YOUR HOME? HOW TO REMOVE A TAX LIEN

Federal Tax Lien

Tax Debt Relief  

You are in the process of selling your house, and your bank alerts you that they found an IRS tax lien, and it needs to be removed for your buyer.

It is not financially feasible for you to pay the IRS lien in full to have it immediately removed

However, you can still successfully clear the title and sell your house.  

The IRS has a lien removal process that allows us to clear the lien, the title, and close your sale even if you are only able to pay some, or none, of what you owe.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

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The lien removal process begins with IRS calculations based on the amount you will receive from selling your house.

The IRS formula includes the following:

 Sale price of  your house.

Amount you owe on your home mortgage.

Closing costs (like real estate commissions).

From the sale price, the IRS deducts the amount you owe on your mortgage along with the closing costs.  After the deductions, the amount you are left with is your home equity.   

If your home equity is less than what you owe the IRS, you will be able to pay some but not all of your taxes.  That is not a barrier to lien removal.  The IRS can agree to remove the tax lien even if you have no home equity and cannot pay at all. 

Here are two examples, one demonstrating the lien removal process if you have some leftover home equity, the other if you do not:

Example #1 – Equity

You owe the IRS $80,000 and have your house under contract at a sale price of $200,000.  Your mortgage balance is currently $160,000, and  closing costs will be $10,000.  Your home equity is $30,000 ($200,000 sale price – $160,000 mortgage – $10,000 closing costs).   

The IRS will accept $30,000 (home equity) of the $80,000 you owe them and remove their tax lien from house.  

Example #2 – No Equity

You owe the IRS $80,000, your sale price is $200,000, but you owe $190,000 rather than $160,000 on your mortgage.  Closing costs are still $10,000.  In this case, your home equity is $0 ($200,000 sale price – $190,000 mortgage – $10,000 closing costs).

The IRS will remove their tax lien from your house without any payment to them as you have no home equity.

If your home equity is less than the amount you owe the IRS, they will accept the equity in exchange for removing the lien.  As the examples demonstrate, the IRS can approve removal of your tax lien so you can sell your house even if there is not enough home equity to pay them.  IRS just gets what you would have received from the sale.  

The IRS does have a formal application process we need to follow for acceptance of your payment amount on the lien.  

The process for lien removal requires the following:

Proof that your house’s value is not worth more than your sale price.  The IRS wants to make sure that you receive full market value for selling your house to ensure they get as much from their lien as possible. To show your sale price is correct, the IRS will require two appraisals of your house, consisting of

An independent appraisal by a professional appraiser, and

Your county tax assessor’s valuation of the property, or an informal valuation of property by a disinterested third party.

The two valuations should be equal to or less than your sale price.  If they are greater than your sale price, the IRS can reject the lien removal and want you to get more for the house (and for them).

Copy of your sales contract/purchase agreement.

Copy of a title report on your house, listing all mortgages and liens (including the IRS’).

Closing/settlement statement for the sale, showing your real estate commissions and closing fees that will be deducted.

Copy of the deed/title to your house.

Copy of your Federal tax liens.

Filing of IRS Form 14135, Application for Discharge of Property from Federal Tax Lien.  The IRS calls your lien removal a “discharge,” the legal terminology under Internal Revenue Code Section 6325.  Section 6325 of the tax code grants the IRS the power to remove your tax lien in return for payment of any equity.  The discharge application is designed to satisfy the requirements of Section 6325.

It is important for us to get the application for lien discharge and supporting records filed with the IRS as soon as your house is under contract.  It can take the IRS 45-60 days to approve the application, so prompt action is best to manage delays in your closing.  

A discharge application is not required if your home equity is more than your IRS debt, resulting in your receipt at closing of enough money to pay your tax debt in full.  The IRS will require payment in full and will file a lien release showing you no longer owe the taxes.  

An IRS lien removal on your home requires a formal application process and must comply with Internal Revenue Code 6325.   Your application requires that the IRS receive your equity to remove the lien.  If you have no equity to pay the IRS, that’s okay too.  IRS can approve lien removal for as little as nothing.  News of an IRS tax lien should not change your plans of selling your house.

 

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

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SHOULD I STILL BE WORRIED IF I HAVEN'T FILED TAX RETURNS THAT I SHOULD HAVE FILED?

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#TaxHelp

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HOW LONG SHOULD I KEEP MY TAX PAPERS?

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WHAT TO DO IF YOU FORGOT TO FILE YOUR TAX RETURN

Tax Preparation

What to Do If You Forgot to File Your Tax Return. Many taxpayers forget to file their tax returns every year. This could happen for several reasons:

You completed your tax return and thought you submitted it to the IRS, but you never did.

The IRS rejected your return and you did not resubmit it.

You were distracted by health problems, financial problems, or some other issues.

You simply forgot to do your taxes.

If you were required to file a return and didn’t, you should complete and submit your return as soon as possible to minimize your penalties and other consequences.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

Unfiled Returns When Tax is Owed

If you owed taxes on your return, you’ll face several penalties:

The failure to pay penalty, which is generally 0.5% of the tax due each month.

The failure to file penalty, which is 5% of the tax due each month.

Interest that accrues each month at rates set by the IRS.

You’ll also need to pay your back taxes. If you can’t pay all of these amounts in full, you may request an IRS installment agreement to make monthly payments. You may also be able to seek penalty relief to reduce how much you owe in tax penalties.

Unfiled Returns When a Refund is Due

If you are owed a tax refund, you won’t face any penalties for failing to file your return. However, you need to file the return within three years of the return’s due date (usually April 15) to receive your refund. After that, you are no longer eligible to receive your tax refund.

Even if you didn’t overpay in tax withholdings, you may still get a tax refund if you qualify for certain refundable tax credits, such as the Earned Income Credit. You need to file a return to receive a refund, even if you aren’t legally required to file.

Other Consequences

The longer you wait to file your return, the more likely it is you’ll face additional consequences. Your penalties will continue to accrue. Eventually, the IRS can file a tax return on your behalf which is known as a Substitute for Return (SFR).

Once the SFR is filed, the IRS can assess tax and then seek to collect it. Your bank account could be levied or your wages could be garnished if you don’t pay your tax and work out a deal with the IRS.

Avoid these problems by filing your tax returns as soon as possible and contacting a tax attorney to discuss your tax repayment options.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation

#TaxAttorneys

#TaxDebtRelief

#TaxHelp

#TaxRelief

#BestTaxReliefCompanies

THE PROS AND CONS OF APPEALING AN IRS DECISION

Tax Debt Help

After you have dedicated your time and energy to earning a lucrative income, an IRS tax liability increase can seem unfair. For those in Houston, Texas that abide by tax laws, getting a notice that you owe more than you believed is particularly hard to accept.

Fortunately, you have rights that can help you resolve your tax issues. One of the most beneficial of these is the right to appeal a decision handed down by the IRS. However, appealing your IRS case comes with disadvantages as well as advantages. It is critical to understand these so that you will make the best decision to protect your assets.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

 

What are the benefits of appealing an IRS decision?

Most people do not appeal decisions made by the IRS, likely because they do not believe they can win. It might surprise you to know that your odds of a successful appeal are pretty high. On average, an IRS appeal reduces tax liability by about 40%. Other benefits of appealing include:

It costs zero dollars

It can eliminate or reduce previous tax liabilities

It is an easy process

Appealing IRS decisions can also extend the deadline for when your taxes are due, giving you more time to gather the necessary funds.

 

What are the downsides of an IRS appeal?

There are few disadvantages of initiating an appeal. One downside is the risk of an appeals officer uncovering previously missed tax liabilities, which will increase the amount you owe. The other disadvantage is that penalties and interest on your balance continue to accrue during an appeal. If you do not win the case, you may end up owing more than you did before you appealed

Increasing your knowledge of federal tax laws and IRS appeal regulations can add strength to your case.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

 

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief

#TaxHelp 

#TaxRelief

#BestTaxReliefCompanies

BEST PRACTICES FOR FILING BACK TAX RETURNS

A taxpayer should use these best practices to resolve a late filed return:

Use IRS wage and income transcripts to file an accurate return.  Late filed prior year returns are closely screened by IRS tax examiners before acceptance to make sure that all income items reported to the IRS (Forms W-2 and 1099) are included on the return.  Taxpayers can pre-screen their returns for accuracy by obtaining their IRS wage and income transcripts directly from the IRS and confirming these items were reported accurately on their return.  This will speed up the acceptance of the return as well as reduce the likelihood of an audit or discrepancy notice.

 

Monitor processing and acceptance. The IRS can take 4-6 months to accept a return as filed – especially if the return is paper filed or if the IRS has current or prior SFR enforcement activity.  Taxpayers should periodically contact the IRS (i.e. every month) to check on the status of the filed return.

 

Request a collection hold to allow to process a return when an SFR has been filed. Taxpayers with an SFR filing will have a balance owed to the IRS.  The taxpayer should request a collection hold to avoid collection enforcement during the time period in which the IRS is reviewing and determining acceptance of the late return.

 

Only the current and past six years are required to be filing compliant.    The IRS usually only requests individual taxpayers to file the current and six prior years’ returns to be compliant.  However, the taxpayer should file any prior tax year in which the IRS filed an SFR.   Taxes owed from an SFR can usually be lowered by filing an original return that claims additional deductions and credits not allowed in an SFR.  Taxpayers who want to know how many years the IRS requires should ask the IRS.  If the IRS requests more than the prior six years, the taxpayer should confirm that the IRS has made a deviation from their normal six-year policy.   Deviations from the six-year policy rule require an IRS manager approval.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

 

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

 

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief

#TaxHelp 

#TaxRelief

#BestTaxReliefCompanies

CAN THE IRS FREEZE A REFUND WHEN I HAVE UNFILED RETURNS?

​Yes, if the IRS identifies that the taxpayer has an unfiled prior year return (especially a return in which the IRS projects a balance owed), they can freeze the refund and request the taxpayer to file.   The refund is held for 6 months while the IRS requests a filed return from the taxpayer.  If no return is received, an assessment may be made through the Automated Substitute for Return (ASFR) program, and the refund applied to any balance due.

Need help with filing back taxes and solving back taxes? Call (713)300-3965

Read More:

https://www.advancetaxrelief.com/filing-back-taxes-.html

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief

#TaxHelp 

#TaxRelief

#BestTaxReliefCompanies