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It's my understanding that back taxes to IRS are not included in your credit report as long as it's less than $10,000 and you've entered into a payment plan agreement [and maintain scheduled payments]. My question pertains to when you turn over your prior two years tax returns for closing. If your tax returns states you owe are you required to prove that debt is settled [paid in full]? Basically, what I'm asking will the bank consider the debt owed to the IRS when factoring your loan approval?
You must have made 3 payments toward the payment plan, and the payment is added to your debt ratio. Terms of a VA cashout refi may well require that the debt be paid in full.
It's my understanding that back taxes to IRS are not included in your credit report as long as it's less than $10,000 and you've entered into a payment plan agreement [and maintain scheduled payments]. My question pertains to when you turn over your prior two years tax returns for closing. If your tax returns states you owe are you required to prove that debt is settled [paid in full]? Basically, what I'm asking will the bank consider the debt owed to the IRS when factoring your loan approval?
Yes, and we just had a deal fall apart on one of our listings because the buyer thought they could hide this from everyone and the lender discovered it and they could not qualify because of it.
Not saying this will affect your qualification, but it can. Disclose everything to the lender up front because they will discover it at some point, and its better to deal with it on the front end than when you are in the middle of a transaction.
Thanks. I understand each lender is unique and it's difficult to forecast everything that may happen or be required. Just trying to get a handle on what is customary / typical in most situations.
I amended my return. I owe $7,900. I requested $125 monthly installment plan. I understand that when factoring your Back-end DTI ratio they only consider your monthly payment, not the entire note. Is that correct?
I amended my return. I owe $7,900. I requested $125 monthly installment plan. I understand that when factoring your Back-end DTI ratio they only consider your monthly payment, not the entire note. Is that correct?
At one time the IRS had to subordinate their debt to the mortgage. I'm not up on that, but it use to be impossible to get that.
Perhaps the other lenders can expand on the requirement, does it still apply? Is this only on VA loans? FHA loans? Fannie? Fortunately, I don't run across this often.
Update: Received a response from the IRS on [9465] requesting to establish a payment plan.
It states "We can't consider your installment request because we haven't finished processing your account. If you haven't full paid the account you owe by the time we process your account, we'll send you a notice of your balance due. At that time, return that notice with full payment or your proposal for payment."
1>. Is this SOP? It's only been a month since my request.
2>. Typically how long will does this processing take?
3>. What are the odds they'll agree to the payment schedule?
4>. I'm assuming I should proceed and begin submitting the amount I requested on my 9465 form to satisfy lenders requirement you have 3-6 month payment history.
Is it true that while the IRS does not report tax liens to the CRAs. Instead it posts them to the public record, and the CRAs do public records searches, to supplement their files, it can appear on your credit report?!
To avoid confusion with the IRS should I wait for the amended return to be fully processed and my installment agreement set up, before you begin making payments? At the moment they haven't completed their investigation.
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