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 October 08, 2007

Home Owners Take on IRS on Foreclosure Taxes
In the unfortunate event that a home owner goes through a short sale or foreclosure, the IRS considers the dollar amount of the loan that was forgiven as income for the debtor. The billing notice can be a sickening surprise for debtors who believed that they had finally crawled out from underneath their burden of debt.
Tax experts report that some people that have gone through this experience are taking on the IRS and winning. Even those who, after the fight is settled, still owe can negotiate lower payments.

Kurt Eggert, a professor with Chapman University School of Law states that the first step to taking on the IRS is to become knowledgeable tax and legal assistance. People that find themselves in this dilemma should not be filing their taxes on their own in this situation.

Some examples are when a tax attorney is able to provide proof that the borrower is insolvent and therefore may be exempt from the tax. Also, the attorney may be able to prove that the original loan process was flawed and prove that the borrower is not liable for the taxes either.

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