The Internal Revenue Service â€” the nation’s tax collection agency â€” recently announced that its Web site will now feature a section dedicated to helping distressed homeowners who are facing foreclosure.
This new addition includes a worksheet to help homeowners determine whether any of the foreclosure-related relief provisions apply to them. In addition, the site also provides a form for homeowners who owe additional tax to request a payment agreement with the IRS.
Keep in mind that these are not new programs or policies.
On the contrary, the IRS has long provided relief provisions that can often reduce or eliminate the tax bite for “financially-strapped” borrowers who lose their homes.
Now with the new section it just makes it easier to access this important tax relief information.
So are you eligible for assistance? Consider the following:
“Under the tax law, if the debt wiped out through foreclosure exceeds the value of the property, the difference is normally taxable income. But a special rule allows insolvent borrowers to offset that income to the extent their liabilities exceed their assets. The IRS cautions that under the law, relief may be limited or unavailable in some situations where, for example, part or all of a home was ever used for business or rented out.”