30k in back taxes, Can I get a mortgage?

[Anonymous]

Hi all, short story....

I'm 30k in back taxes from previous marriage. I have been working on my credit and hope to apply for a mortgage in 3 to 6 mos.

Where can I get help to resolve this tax issue for less or set up a payment plan?

Will this stop me from getting a mortgage?

The taxes are not on my credit report and I have received a few letters stating the amount owed. Recently one from somewhere in Cincinnati for the amount of 3k.

What should I do?

Thanks in advance for your help.

[Anonymous]

I have a payment plan with the IRS on 8K. I have been told it will not have a negative impact on a mortgage loan as long as the agreement is in good standing but I cannot confirm that. 

If it is federal you can call the IRS @ 800-829-1040 and they can gt you the forms. 

Good Luck!

[Anonymous]

Right now, you cannot even talk to a live person on the phone at the IRS. I tried yesterday, and all you get is a recording.

First thing that you should do is set up an account online (Irs.gov) if you haven't already done so, and see exactly what you owe.

I believe that you can set up a payment arrangement online as well.

If you cannot set up the arrangement online for some reason, you can still make payments electronically via bank account or credit card.

If you owe back taxes (previous years- not 2019) and they are subject to a lien, then you must have a payment arrangement in place and have made 3 payments before applying for a mortgage. If it's just current taxes (2019), there doesn't have to be an arrangement in place before applying. This is just my understanding from a conversation that I had from a mortgage company yesterday.

Another option is an "offer in compromise ". You can offer to pay a certain amount and the IRS  accepts of rejects it. The offer in compromise can be applied for online as well (there is a worksheet that you can fill out on the IRS.GOV website that will you give you an estimate of what they will accept). They ask you for your monthly expenses, bills, etc.

All forms (payment plan and offer in compromise) are available for download and print on the IRS website. You can do this stuff yourself without involving a 3rd party agency or anything.

Hope this helps!

[Anonymous]

Thanks for the reply. 

Should I make a payment arrangement on the entire amount or each year separately. Also. I've heard the OIC is very difficult to get approved for, will I have to pay a fee from them to consider a offer in compromise? 

Has anyone had any luck with such a large amount. 

The crappy part is the ex has no ability to pay and this is now on my shoulder solely.

Also, the IRS did take my refund last year, does this change anything? 

[Anonymous]

I have no info on the OIC, but I owe for two years and it is rolled into one agreement. I pay a set $150 a month and as one year is finished the funds are rolled to the next year. They keep all returns and apply them until the debt is settled. And...I didn't think about the IRS not taking calls. I know you have to physically call to alter a direct payment (bank draft) plan but I agree with the other post...I think the setup  can be done online. 

-Nik

[Anonymous]

Good Info 

Any thoughts on what a payment on that amount would be?

I was hoping to get a settlement and then set up payments on the decreased amount.. any hopes of that?

Also, should I go ahead and make a agreement on the letter I received from Cincinnati?

[Anonymous]

I don't know anything about how the settlements work. Sorry.

I asked what the minimum monthly payment could be. My original debt was over 4 tax years and 12K. (LONG STORY) I was told $150 a month minimum so that is what I have been paying.  

[Anonymous]

Do you owe state and federal taxes? Or just federal? Is there currently a tax lien?

You cant make payments on an offer in compromise. In order to pay the lower amount, you have to have the ability to pay the whole thing.

The IRS will roll all the taxes for tax years due into 1 payment arrangement (for federal). If you owe state as well, you will need to make a separate agreement to that state.

Is the Cincinnati for state taxes? As for the payment amounts, it kind of depends on what you can afford. Obviously the more the better, but you can always pay extra if you have it at some point. I believe it's based off the balance being paid off over a certain period of years. I paid $330 a month on just over $20k awhile ago. Whatever payment that you set up will go against your DTI for mortgage qualification too. 

Something else to keep in mind- interest and late fees continue to accrue even when your in a payment arrangement. 

[Anonymous]

The 30k is federal tax owed from my ex husband and I. I do have a small amount owed to the state from before I was married. 

Their current is no liens.  I have a letter from the IRS from a Cincinnati location that is a tax levy for 3k... not sure how to address that..?

[NC_Mtg_Loaner]

A lender will need to see the terms of a payment arrangement to satisfy any delinquent taxes with the IRS and to verify and confirm that at least 3 regularly scheduled payments have been made and they will then include that amount of payment into your DTI for the transaction.