Distressed Homeowners Can Resolve Their IRS Back Taxes

The US economy has been slow to recover from the recession, and as a result, many American homeowners have lost their jobs and are unable to find new employment. These same folks, some out of work indefinitely, are struggling to pay their bills and keep a roof over their head. Households who find themselves this far underwater and unable to pay their mortgage may feel forced to consider home foreclosure as a solution. While this decision is probably one of the most difficult to make, taxpayers need to be aware that while foreclosure may feel like a clean slate, it also comes with tax obligations many homeowners are not be aware of.

To the IRS, foreclosure is a form of debt cancellation, whereby a lender forgives some or cancels all of a particular debt, and classifies the foreclosure amount as taxable income to be disclosed on the homeowner’s next tax return. Since a foreclosure is usually done under duress, many unwitting taxpayers are unaware of their tax liability and shocked when they receive a letter from the IRS stating the amount due. If you are deciding whether to go into foreclosure or have recently received a foreclosure notice, don’t panic; there is a solution to every problem. The good news is that there are professionals who can help with these matters.

Giving up your home due to an inability to pay then getting hit for IRS back taxes can be overwhelming for those who don’t know where to turn. I advise distressed homeowners to seek the advice of a Certified Tax Resolution Specialist (note I say “certified” – verify the tax resolution provider is certified before you sign on with a representative!) or tax attorney who specializes in tax problem resolution who can insure the canceled debt is properly handled.

Consult the Experts Who Can Resolve Tax Issues

With foreclosures up 47% in March from a year ago, and over 3 million homeowners nationwide in possession of foreclosure papers (according to RealtyTrac), the situation is going to get worse before it gets better. A certified tax resolution expert or tax attorney can assist in determining your liability, find viable options for resolving tax debt, and be your advocate to help negotiate a settlement for any IRS back taxes due by either establishing an installment payment plan or achieving an Offer in Compromise.

IRS stress can be overwhelming, people have to remember that they are not alone, there are credible firms who can help. Look for firms who are part of the Tax Problem Resolution Services Coalition to see who is part of the community dedicated to ethical practices first because not all the companies who buy TV, Radio or Internet ads are reputable! My company, Tax Resolution Services (www.taxresolution.com) is part of the Tax Problem Resolution Services Coalition and is known for being the most credible firm providing incredible results. I write on this blog to help educate and empower people as there are solutions and resources out there to help take the IRS stress off your dining room table!

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