The mortgage application was started during the second half of February and is still not completed.The underwriter says that he is waiting for a confirmation from the IRS stating that the buyer's tax form is correct before giving the final approval for the loan. It is taking forever--at least 3 weeks have passed with no progress. Is there any way to speed up that process?
I am open to any suggestions?
Inheritance tax in PA is due in 9 months from the date of death. You can get a discount of 5 percent if the tax is paid within three months. It sounds like the bank is trying to confirm that the buyers tax return is correct by requesting a copy of the return or a transcript from the IRS. Three weeks is not a long time for this process. If you are close to the deadline for filing and paying the inheritance tax, you could consider having a tax professional request the tax verification from the IRS. The bank would have to agree to this, and they may not since the verification is out of there control. You should also ask the bank how long this has been taking them with other loans.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.
Here is an excerpt from the filing instructions for the PA Inheritance Tax
Return which provides the answer as to when to file:
"2. WHEN TO FILE
File as soon as possible after the decedent’s death, but not later
than nine (9) months from the decedent’s death. Failure to file
may subject the estate to a penalty of 25% of the tax ultimately
found to be due or $1,000 whichever is less. If the
return cannot be filed when due, an extension of time to file can
be requested from the Department of Revenue. The extension
request should include an estate file number as assigned by the
Register of Wills, if available. The extension request must be
made before the return is due, and should be mailed to:
PA DEPARTMENT OF REVENUE
BUREAU OF INDIVIDUAL TAXES
INHERITANCE TAX DIVISION-EXT
PO BOX 280601
HARRISBURG PA 17128-0601
The Department’s granting of an extension to file does not
relieve the estate from payment of interest which will accrue
beginning nine (9) months and one (1) day from the decedent’s
death on any tax ultimately found to be due and not timely paid.
The extension request must include the decedent’s name, county,
file number, date of death, social security number and the reason
for an extention. Extensions will be granted for events
beyond the control of the estate such as litigation over assets and
will disputes. Extensions are not granted for events within the
control of the estate such as a failure to collect the information
needed to complete the return.
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Mr. Fromm is licensed to practice law in PA with offices in Philadelphia and Montgomery Counties and services clients in all parts of Pennsylvania. He can be reached at 215-735-2336 or at the email address listed below. He has received a 10.0 rating from AVVO and recently was featured as a 5Star Wealth Manager in the Philadelphia Magazine, November 2009 issue on page 123.
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Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.