How to Start Trading in the UK
August 24, 2022What Are Amended Tax Returns?
August 24, 2022During the COVID-19 pandemic, the IRS established specific rules and regulations to assist individuals who struggled to pay their taxes, providing special tax assistance to individual taxpayers and families, businesses, tax-exempt organizations, and others, including health plans, affected by the coronavirus.
Is getting a mortgage possible with back taxes?
In a word, yeah. Tax debt, often known as back taxes, will not prevent you from obtaining a mortgage. However, specific rules and regulations prevent you from closing new loans in some exceptional cases.
The lengthy answer is whether you acquire the mortgage has less to do with the IRS and more with your lender’s requirements. The sort of mortgage you seek will also significantly impact how past taxes may influence your eligibility. If you owe past taxes yet want to buy a house, there are some things to consider, and in most cases, it is wise to talk to a tax consultant.
How can I get a mortgage with an IRS tax lien?
You know obtaining a mortgage is possible if you owe unpaid taxes to the IRS. If you owe a significant amount of past taxes and have not arranged with the IRS to pay, delay payment, or settle the taxes, the IRS may pursue collection procedures such as issuing levies and liens. A tax lien, in particular, might harm your prospects of purchasing or selling a property. When the IRS gives a tax lien, it informs all other creditors that it has a debt to collect from you first.
You will have difficulty securing a mortgage if you have an IRS lien on your income or assets. Tax liens will not appear on credit reports, but they will likely occur when your lender searches for any liens. Lenders might interpret unpaid taxes as a sign that the mortgage will fall behind. While a tax lien will not necessarily disqualify you from a loan, it may exclude you from typical private mortgages or significantly increase your interest rate, making it financially unattractive to consider a mortgage.
Passport Revocation or Denial Due to Certain Unpaid Taxes
If you have a substantial tax liability, the IRS is legally authorized to certify that debt to the State Department for action. The State Department will not usually grant you a passport after getting IRS approval. The State Department may refuse your passport application or cancel your present passport. If you are abroad, the State Department may grant you a restricted validity passport acceptable for a straight return to the United States. If this is your case, you should contact a consultant immediately, as getting your passport revoked can significantly affect your life and well-being.
What to do when in debt?
If you find yourself in a situation where tax debt has to be paid, but you cannot come up with the funds, it might help you make an alternative payment arrangement with the IRS. Alternatively, you can try to get into the fresh start program. The fresh start program is an initiative created by the IRS to help businesses and individuals deal with tax debt in a manner that benefits both the tax regulators and the people responsible for the debt. While debt has to be paid back to the IRS in case of debt, the IRS has shown to be very forgiving when it comes to paying back your tax debt. For example, tax debtors can arrange unique payment plans with the IRS to prevent problems from arising in the first place. In addition, setting individual payment plans can help avoid wage garnishments or other liens on your assets.
How the fresh start program can help you
Because of its flexibility, the IRS Fresh Start Program is an ideal choice for inadvertent tax offenders. Despite its many advantages, the software has created misconceptions regarding its capabilities. Because some people accidentally breached tax regulations, the IRS established the Fresh Start program to assist them. The IRS’s non-serial offender standards are flexible guidelines that may be the best answer for people who qualify.
The Fresh Start Program allows taxpayers with outstanding taxes to enter into an arrangement that spreads payment over months but no more than 5-6 years. Contact one of our qualified tax consultants to see whether you qualify for the fresh start program.
