Legal Question in Credit and Debt Law in California
I lost my house 4 years ago, the Bank take off, today I receive a letter from the IRS
informing me that I 2.600. more than 600 of penalty and interest 600 for a total of 3.800 should I pay or arrange for a property that no longer do I have?
1 Answer from Attorneys
You should talk to a CPA to see if you qualify for the insolvency exception and possibly file an amended return. Fighting the IRS isn't like disputing a charge on your credit card. They will assume their are correct and will expect you to show that you don't owe the taxes and they have the power to seize your assets without going to court.
After the foreclosure, the bank probably send you a 1099 form for the debt forgiveness that resulted from the foreclosure sale. You need to research this and go from there.
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