Sympathy from the IRS

Efforts to help cash-strapped homeowners who have federal tax liabilities were announced by the Internal Revenue Service on Tuesday.

In what he described as “an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home,” IRS Commissioner Douglas Shulman stressed that the goal was to “balance our responsibility to enforce the law with the economic realities facing many American citizens today.”

As for the IRS’ part: “It currently takes about 30 days to apply for and receive either a discharge or a subordination of a federal tax lien,” he said. “The IRS is committed to putting in place whatever resources are needed to speed this process up as much as possible.”

When pressed on the meaning of the word “discharge,” Director of Collection Policy Fred Schindler said that meant the IRS “removes the barrier of the lien but does not remove or excuse the debt.” The taxes are still owed and could attach to wages or a car, for example.

Asked if speeding up the normally 30-day process meant 24 hours or seven days, Schindler offered no specifics.

This would seem to be a crucial point, considering that the announcement was about expediting the process. If you have one of the more than 1 million federal tax liens that are tied to both real and personal property and you want to explore this process, get back to us on how fast it goes.

The efforts are geared to previously compliant taxpayers. More information is available at www.irs.gov.

-- Lauren Beale