Irs Debt Relief Irs Debt Relief

Finding IRS Debt Relief

With all of the economic troubles of recent years, the government has put some measures in place to try and help individuals to get back on their feet again. There are some IRS debt relief measures that have been implemented to give individuals more of a break on their income tax return so that help that they have received with mortgages and other home related improvements and forgiveness are not counted against them as additional income and taxed, which would defeat the purpose of the help in the first place. These IRS tax debt relief plans have been in effect since 2007 and apply to the income taxes that were filed in 2007, 2008 and that will be filed for 2009.

Mortgages

IRS debt relief came in the form of the Mortgage Forgiveness Debt Relief Act in 2007. This was formed in order to help home owners get back on their feet with their homes so that the homes would not go into foreclosure if at all possible. It gave mortgage companies a little more leeway in working with their clients to forgive parts or all of late payments, or to roll them back into the loan. What would have happened in the past with these loan forgiveness plans is that the amount of money that was rolled back into the loan or was forgiven by the lending company would have been taxed as income by the federal government. Under the new act, the IRS debt relief allowed individuals to show the amount that was forgiven or rolled back into the loan, but it would not count against them as far as owing more taxes due to additional income.

It is important for individuals to know that this is the case so that when they do their taxes themselves, they do not count that money against themselves and lose out in taxes. There is a Form 982 that should be filed with the amount of money that was forgiven or rolled into the loan so that the IRS debt relief in that situation can be given. Most software tax programs have this built into them, but individuals should still be aware so that they do not miss this IRS debt relief credit when doing their taxes. Accountants should be informed of all the latest tax laws, although since the act was passed by legislature so late in 2007, there may have been some tax offices that were not up to speed, with the now documents only being available late in the season and the electronic versions were not available at all until March of the filing year. If an individual feels that something was missed for that year, he or she should talk to an accountant about it.