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Posts: 8
Registered: ‎11-26-2012
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Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

[ Edited ]

I've been a lurker on this forum for a couple years back when my credit scores was in the 400s. After working very hard, I got my credit up into the mid 700s before it coming back down to mid-600s once an old collection popped up. Thanks for everyone's help!

 

Anyway, I paid that off, got pre-qualfied for a 250K FHA loan and all seamed amazing with the world. No "normal" debt, everything coming into place. Bunch of credit cards, 25% utilization,  couldn't believe it was so "easy".

 

Well I didn't file taxes for 04, 05, 06, 09, 10, and 11 (long story). Once I got a notice in the mail, I hired a lawyer, got all my returns taken care of and had less than 25k in total IRS debt so they allowed me to do a streamlined payment plan over 60 months. I never got a tax lien, it was never deliquent (well, you know what I mean) and I felt great for getting this taken care of. Now I'm worried.

 

Now that my loan has gone to underwriting, they made me sign a 4056-T form to verify that my tax returns and W2s were accurate. They say it's just to make sure there's nothing fraudulant going on and they just want the "TBR"s... just to verify income. I told my loan originator the situation but he says we have to wait until the transcripts come back. Various things I've read say you cannot close on an FHA loan with a tax lien (I don't) and you can as long as you have an installment payment agreement in place (I do).

 

Obviously, it would crush my family if this falls through and we have to stay in the rental home in the semi-dangerous neighborhood with the less-than-desirable schools. I'm doing everything I can to come through for them but I have a feeling all the work I've done will come crashing down when they realize I owe the IRS $23k even though I have an agreement in place with the IRS.

 

Anyone have experience with this? Any advice? Anything to make me stop stressing out? I'm sick to my stomach. Underwriting says we should have that back in the next 48 hours max since they are a big lender and the IRS is typically quick with them.

 

I've read both sides of this but a lot of the advice is dated before the IRS stopped being so hardcore about liens.

 

Thank you so much for any advice!

 

TL;DR?

 

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Registered: ‎09-16-2011
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

[ Edited ]

I think you will be fine; there are plenty of folks here in the same situation. As long as you are in a payment plan with no federal leins you will be fine. As long as your CAIVRS is clear you will be ok.

Also, you want to go ahead and notify your lender about the payment arrangement. They will likely add this payment to your DTI. Best of luck! Keep us updated on your progress! Disclosing your IRS tax payment plan to your prospective lender is a smart way to show the loan officer in charge of your application that you both have the ability to pay off your debt and that the debt is not in danger of becoming delinquent.


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Registered: ‎10-31-2011
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)


webhopper wrote:

I think you will be fine; there are plenty of folks here in the same situation. As long as you are in a payment plan with no federal leins you will be fine. As long as your CAIVRS is clear you will be ok.

Also, you want to go ahead and notify your lender about the payment arrangement. They will likely add this payment to your DTI. Best of luck! Keep us updated on your progress! Disclosing your IRS tax payment plan to your prospective lender is a smart way to show the loan officer in charge of your application that you both have the ability to pay off your debt and that the debt is not in danger of becoming delinquent.


+1 and I would also have all IRS docs at the ready so when your LO calls you can fax or drop them off immediately. Better to be proactive than reactive. 

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Contributor
Posts: 84
Registered: ‎09-28-2012
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

[ Edited ]

Glad I found this I am going through the same. I just signed the 4056-T yesterday, but mailed my 2011 return in last week. How long is it usually until they accept it (IRS), and should I be worried it won't by the time the lender pulls it? Closing is 12/19 And I will only owe the IRS $700, sent a check for the other half owed with my return.

New Contributor
Posts: 63
Registered: ‎01-29-2012
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

It will take 4-8 weeks for IRS to process your tax return, and it do not make difference  if you own 700 or 7000 $ when lender pull 4056-t there will be no data coz they need time to process , unfortunately there is little to nothing you can do to make it faster and you need 2 years of tax returns if you don't have you wont be able to get loan.

Contributor
Posts: 84
Registered: ‎09-28-2012
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

Well then I guess I am screwed this sucks. I thought they can accept returns quicker, they usually do.. and it's not even the busy tax period right now.

Contributor
Posts: 79
Registered: ‎01-10-2012
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

Hi Mission, There are two types of transcripts that can be pulled with the 4506, a return transcript or a tax account transcript.  In my recent experience the lender pulled a return transcript.  The return transcript only reflects the information that was on your 1040 form, it does not show current outstanding balance for any tax year.  The tax account transcript would show payments made and balances remaining however my lender did not pull that type of transcript, they were solely interested in verifying that my reported income with the IRS was consistent with income reported to them.  I think you're going to be just fine.  Good luck!

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New Member
Posts: 8
Registered: ‎11-26-2012
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

[ Edited ]

Thanks to everyone for the replies, didn't hear anything today... still in limbo even though you made me feel a bit better about it (until I read Katie's reply).

 

Katie -- That's what the loan processor gal told me when she called to say she emailed the form for me to sign. I didn't want to tell her exactly the reason why I was concerned, but did ask her if the LO went over it with her and she said "yeah, he said you just recently filed all your returns" and I left it at that. LO told me not to mention that until they came back and there was potentially an issue.

 

Here's what has me worried... she checked the Return Transcript box (what you describe) AND the Account Transcript box. The latter says it has more detail on the status of that particular account, penalties owed, etc. She swears it's just to see the detailed tax returns and what was claimed, deductions, maybe there's a failing side business, etc... but as you can see "I've" requested the Account Transcript. That can't be good can it?

 

Here's a link to the form for reference:

http://www.irs.gov/pub/irs-pdf/f4506t.pdf

 

Probably not worth worrying about until it's worth worrying about. Just glad I'm at least aware of this possiblity... I've spoke with my wife about it and we're blessed to even be in this position and trust whatever is supposed to happen -- will. Smiley Happy

 

 

New Contributor
Posts: 63
Registered: ‎01-29-2012
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

Your loan wont be approved until transcripts are available , what's gone happen now  lender will request transcripts from IRS , there is no data in IRS and transcripts will be returned with NO DATA AVAILABLE , how I know this ? coz It happened to me few months ago

New Contributor
Posts: 53
Registered: ‎01-24-2008
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Re: Under contract, but very worried (IRS / 4056-T form / Streamline agreement)

I may be in the same boat too.  Mailed in 2011 taxes a few weeks ago.  Wasn't expecting to be pre-approved, find a house and be in escrow so fast, but we are now with a closing date of 12/21 and I'm crossing my fingers that the transcript will be available soon.  We're getting a refund so I read that may be a bit quicker processing than returns with payments due.  For your loan that didn't approve until the transcripts showed, did the underwriter wait and you still got the loan or did they just halt everything and make you start over?

 

Thanks.

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