topic Re: Help (Again)! Any Tips for Getting the IRS to play ball? in Mortgage Loans

Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Sat, 20 Feb 2010 05:48:03 GMT

It's me again. Uggghhhh. Finally, everything is done...appraisal, home inspection, survey...all are fine. I have had a conditional loan commitment for my FHA loan since 2/12 (the final day of my 30 days), and the only thing the UW needs is the transcript of my 2009 taxes from the IRS (she already has 2008 tax transcripts). Closing is set for 3/11.

I am self-employed, so owed taxes for 2008 (paid on time) and for 2009 (will pay on time - had to show proof of funds for UW. We're set there.). Filed my taxes electronically on 2/3. Received notice from IRS on 2/4 that my return was "accepted." UW sent request for transcript (Form 4506-T) to IRS on 2/9. Supposed to take up to 10 business days to process (2/23). Both real estate agents were getting antsy, wanting the release of the financing contingency, so I called the IRS yesterday to see if we could speed up the transcript, since it is literally the only thing left. You won't believe what they told me.

In order to provide anyone with a transcript, my tax return must first be processed. Since I am not due a refund, my taxes are last in line to be processed. IRS guy #1 told me that it wouldn't be processed until 4/15 or LATER, and there was absolutely nothing he could do. My returns were "in a black hole...in limbo." No fee I could pay to speed things up. Called LO who told me to call my congressman (seriously). Did, but of course, had to leave a voicemail. No one has returned my call, of course. Called FHA (took me calling 10 numbers to get to a real person, who told me she couldn't help me), and person there advised me to call IRS again. Did. IRS lady #2 told me pretty much the same thing as guy #1, but said "in general," returns were processed within 2-3 weeks. Told me to call back next week. Am scared I'm just going to get the run around next week, and this will go on and on and on. Called LO again and asked if UW would take ANYTHING else from ANYONE else. She's tried everything, including letter from CPA. UW can't budge, since it's a requirement for FHA. Anyone have any suggestions/recommendations? I'm about at the end of my rope. Thanks in advance!

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Sat, 20 Feb 2010 07:11:42 GMT

there is little you can do to prod the IRS. You can request a tax advocate but that alone is a long process. Unfortunately, it is common for trun around times to be in the neighborhood of 12-16 weeks. I am still waiting on stuff to get figured out from lat February.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Sat, 20 Feb 2010 15:26:41 GMT

That's not very encouraging. In other words, it sounds like I'm going to lose this house over this 1 piece of paper. I don't understand how this is possible. The IRS is basically saying that individuals who do not qualify for a refund CANNOT buy a house with FHA during the first 4-6 months of every year if they need to use the prior year's taxes???? How can that possibly be correct????

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Sat, 20 Feb 2010 22:56:21 GMT

If your income was pretty consistent from 2007, 2008, and 2009, then the UW should be able to look at 2007 and 2008 and average them and them use 2009 income as a guide as well. Were you S/E in 2007 as well and was the income similiar. But with SE income banks got burned by too many people defaulting so now they want full documentation. If you owed money it makes it alot harder because the UW needs to see documented proof from the IRS that it has been paid and poses no threat to the mortgage. Unfortunately even with people with refunds, even thought they get the refund relatively quickly, it cans till take awhile before the tax transcripts are available. The real issue here is that your LO and UW should have been aware of this from the start and if they needed 2009 taxes to be counted, they should have told you to not be bidding/go under contract on houses until transcripts were in.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Sat, 20 Feb 2010 22:58:06 GMT

And to clarify....The IRS does not say anything about buying or not buying a house. As far as they are concerned, the length of time it takes them to process the paperwork is an internal matter nad has absolutely nothing to do with your desire to purchase a house. Again, the fault here lies with your lender and their inability to see this coming, or to accept older tax years if possible.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Sat, 20 Feb 2010 23:06:45 GMT

I just re-read your other thread and have a bit more info. The UW can not count 2007 because SE was just the last 2 years.

UW and LO BOTH should have known that tax trasncripts would be required for 2009 prior to allowing a loan.

Filing taxes, and having them processed/transcripts available are 2 different things. UW like to see transcripts because often in processing things get changed, especially for SE and when deductions are figured out. (allowed/disallowed) Knowing this, the LO/UW should have told you to hold off until transcripts were available, but the current lender was trying to jump in and help you when Wells Fargo fell through (probably for similiar reasons.

I wish you luck and you can try to talkk to the UW, but as with Wells, they are unlikely to bend on this, Once they make a decision or insert a requirement there is usually not room to maneuvar unless a mistake has been made or something has been missed.

Good luck getting it sorted out.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Sat, 20 Feb 2010 23:29:01 GMT

Thanks for your input mickie08! I have actually had SE income since 2004, but there was a huge jump in my income from 2007 (postdoc student, part-time SE) to 2008 (licensed professional, FT SE). The income remained steady from 2008-2009. I still blame the LO at Wells Fargo for this huge mess, as she was the one who told me I just needed to complete my taxes, but that I didn't need to file them. I had them done on January 2. The absolute earliest I could have filed would have been Jan. 15, as that is when the electronic filing system opened up. But still, I lost almost 3 weeks due to her.

I'm not faulting my current mortgage broker at all. She has been absolutely fantastic and is really doing her best to get me through this process as quickly and painlessly as possible. Sadly, she is the first person I contacted way back when and the one with whom I felt the most comfortable. But I was talked out of using her initially by my realtor (not that he knew her...it was just that she is a broker as opposed to a banker). Lesson learned: Go with your gut!

I know the IRS has no say so in the home buying process, but there is a snowball effect if they don't process non-refund tax returns until April 15 or later. You would think someone somewhere would have run into this problem before. My LO told me that this is the first time in her 23 years that this has happened. She does state that the UW is more hopeful. The UW says it is taking 4-6 weeks to pull the transcripts directly from the IRS (5 weeks from the date of filing is my closing, though). I've been doing some more research, and it looks like most returns get processed within 7-21 days, which would be the end of next week. I'm really hoping that's the case. Looks like it's going to be a tight squeeze!

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Tue, 09 Mar 2010 19:55:14 GMT

I'm in a similar situation, did you have any updated to your situation? Are you going to get to close on time?

Thanks, in advance :-)

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Tue, 09 Mar 2010 21:31:31 GMT

Hi, mpd1975. I'm still waiting. I'm not going to be able to close on Thursday. I've called the tax advocate's office, the tax advocacy panel, my congressman, the governor's office, the local NBC news station, FHA, Fannie Mae, etc., etc. No one can do anything. The sellers have delayed their own closing, but I have no idea what's going to happen from here. The tax advocate said she could fax a transcript to the IRS office, which the office could then stamp, and fax to my underwriter (with me present, of course, which would mean I would have to drive from FL to TX, which I was willing to do). But my mortgage broker said the lender won't accept anything other than a transcript from the IRS via a 3rd party processor. She said her other lenders are all the same. I don't think the returns will be processed until some time after April 15. Whether I'll still have a house by then is unknown. To be honest, I pretty much feel like waving the white flag. Sorry I couldn't give you more positive news. What's your situation, if you don't mind me asking?

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 10 Mar 2010 00:44:39 GMT

Wow, I am so sorry to hear that. You poor thing. Our situation is that we weren't told that we had to have our taxes filed before the mortgage could close 2 weeks before said closing (informed 2/26, closing 3/12). We immediately e-filed but as you know, it takes longer than 2 weeks for it to be processed. Fortunately, we are getting a refund so hopefully it will be processed in the next couple of weeks and then we can continue with the loan and hopefully close within a week after it is processed. We'll see. If we had just known beforehand, we would have done our taxes in January! I hope your situation works out for the best. I am sure it doesn't feel hopeful.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 10 Mar 2010 02:29:31 GMT

Yes, since you are due a refund, your returns take priority. You shouldn't have to wait very long. In fact, if it goes longer than the 2 weeks, you can get a tax advocate, and they can expedite the processing of your returns, since you have a house riding on it. I was told I had to file, but no one told me that the returns wouldn't be processed for literally months. Good luck to you! Sounds like you're in a much better place than I am.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 10 Mar 2010 12:20:22 GMT

This is crazy. How can a bank make someone file taxes before April 15th? Is this just this certain bank or does it have to do with self-employed? If a person has shown they've filed, but the IRS doesn't have the transcripts, what more can the person do?????

We're scheduled to close April 10th. I have filed my taxes (and gotten my refund), but my fiance has not because we were having him claim the tax credit. Without the credit, he would owe a couple thousand, but we figured this way we'd apply the credit and get the refund. We're both W-2 employees. The file hasn't gone to UW yet because the LO is putting the finishing touches on the file.

I've been a nervous wreck and now this is just one more thing to worry about.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 10 Mar 2010 13:07:12 GMT

PatienceGrasshopper wrote:
We're scheduled to close April 10th. I have filed my taxes (and gotten my refund), but my fiance has not because we were having him claim the tax credit. Without the credit, he would owe a couple thousand, but we figured this way we'd apply the credit and get the refund.

Are you sure you can claim the tax credit for tax year 2010 for money owed now for tax year 2009?

Just curious...

(Edited to clarify my question)

Message Edited by Uborrow-Upay on 03-10-2010 08:07 AM

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Jazzzy — Wed, 10 Mar 2010 13:20:01 GMT

@Anonymous wrote:
PatienceGrasshopper wrote:
We're scheduled to close April 10th. I have filed my taxes (and gotten my refund), but my fiance has not because we were having him claim the tax credit. Without the credit, he would owe a couple thousand, but we figured this way we'd apply the credit and get the refund.
Are you sure you can claim the tax credit for tax year 2010 for money owed now for tax year 2009?

Just curious...

Yes...my understanding is that you can file for the credit either with your 2009, file amended 2009, or wait and file it with 2010.

My daughter closed in August 2009 and filed an amended 2008 return for the credit.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 10 Mar 2010 13:26:19 GMT

Thanks, Lynette!

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 10 Mar 2010 14:15:34 GMT

Hi, PatienceGrasshopper:

The bank isn't making me file 2009 taxes. I have to use my income from 2009 in order to qualify for the house and show 2 full years of SE income. You and your fiance could use 2007 and 2008 tax returns. Unfortunately, I cannot use 2007 returns because I was a FT postdoctoral student, so I didn't make very much money as a W2 employee, and even less in SE that year. Mine is a fairly unique situation that will not affect tons of people. I just wish someone would have let me know that this would be an issue beforehand. I could have easily waited to put in an offer on the house, which means the sellers could have waited to put in an offer on THEIR house in NC, and we wouldn't all be in this mess. But I'm out of my funk from last night, and this WILL work out, and the house WILL be mine! We just have to wait and trust that this was meant to be. I have printed out an e-mail I received the other day that is helping me get through this (and I'm not trying to shove this down anyone's throat), but it says "If God brings you to it, He will bring you through it." Wait and trust...it's all I've got right now.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Tue, 23 Mar 2010 21:19:21 GMT

I am in the same boat you are in and have taken the same measures tax advocate, IRS office, IRS 800 number, contacted my state representative. I was wondering if everything worked out for you? Or are you still in limbo? I was first told 3 weeks processing, then 30 days, then 8 weeks. I have not heard about after 4/15 if no refund is due... guess I havent got that representative. I am just unsure if there is anything we can do at this point. Just sit and wait and hope for the best.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 24 Mar 2010 01:25:22 GMT

Hi, Brz:

Nope, I'm still waiting, still in limbo. It's been almost 7 weeks since I filed. Tax advocate does not seem to be able to do anything that I need her to do (get the returns into the transcript system). Since my last post, I've been told that balance due returns do not even start processing until the 20th week of the year, and today, I was actually told that they don't post in the transcript system for 5-6 months after filing. The sellers literally have their entire house packed up except for large furniture and have had to postpone their own closing in NC. I feel so bad. Had I known, I would have NEVER made an offer on a house. I hope you have better luck than I have had!

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 24 Mar 2010 19:29:09 GMT

I spoke with someone today at the IRS and received that same story. It has been at least 15 times and each time something different. Today is the first day the actually issued me a tax advocate. I previoulsy called and tried to get a tax advocate on my own but they said they couldnt help. Nonetheless, today they gave me this resource, which will be calling me no later than monday or tuesday. Did I mention that I close on 3/31/10. I have lease on my house for 24months and they are set to move in on April 1st - 5th. So, I am pretty much going to be out of a home that I own because I was told all set just need this one piece of paper. Talked to the IRS (the 1st time) and was told it should be ready by 3/17, still nothing. Then 30 days (today) and more different answers. Today I had to ask for an extension, but if the advocate can not do anything then I have to figure out what to do until May timeframe. This is a big mess, I dont know how they can set these guidelines and not have effective tools available to help people when in this bind. Hopefully the tax advocate can do something. Good Luck! Keep me posted as I am anxious to hear if this actually works out for anybody.

Re: Help (Again)! Any Tips for Getting the IRS to play ball?

Anonymous — Wed, 24 Mar 2010 20:04:02 GMT

tax advocate can do absolutely nothing to speed up the process. Their job is to mediate disputes between the IRS and a consumer who disputes taxes owed, penalties, etc. There is basicly nothing you can do to push the IRS faster. Just keep calling every week or so to check in and make sure where you are at. They always give you different answers as far as timelines because there is no guarnanteed timeline for the IRS. They take in 200 million tax forms mostly in a 2 month period and any info on when things get done is just a guestimate from whomeever you talk to. Hence the changing stories every time you call. I am still trying to get my 2008 refund straightened out and that is from February of LAST YEAR.