Clear Start Tax Explains How Unpaid Taxes Can Block Loan Approvals — and What Buyers Can Do to Stay on Track
IRVINE, CA / ACCESS Newswire / April 30, 2025 / For many aspiring homeowners, the dream of buying a house can quickly turn into frustration, especially when tax debt enters the picture. According to Clear Start Tax, a leading tax resolution firm, unresolved IRS debt is a common but often overlooked reason for mortgage delays or denials.
While most homebuyers expect lenders to review their credit history and income, fewer realize that a tax lien, wage garnishment, or even an unresolved payment plan can disqualify them from a loan. And in today's competitive housing market, that kind of surprise can mean losing out on a home.
Why Lenders Care About Tax Debt
Mortgage lenders view outstanding tax debt as a major financial red flag. When the IRS has the legal right to claim a portion of a borrower's income or place a lien on future property, it poses a risk that lenders are often unwilling to take.
"We've worked with clients who had strong credit and stable income, but their mortgage application was denied due to unresolved IRS debt," said the Head of Client Solutions at Clear Start Tax. "The good news is, there are steps borrowers can take to get back on track before it's too late."
The Most Common Tax Issues That Disrupt the Mortgage Process
Clear Start Tax identifies several tax-related problems that often surprise buyers in underwriting:
Tax liens filed by the IRS or state agencies
Open balances with no formal resolution in place
Wage garnishments or levies
Unfiled returns that raise questions about financial transparency
Defaulted installment agreements or lapsed payment plans
Even if a buyer isn't actively being garnished, lenders may still require full resolution or proof of compliance before approving the loan.
What Buyers Can Do Before Applying for a Mortgage
Clear Start Tax recommends that anyone planning to buy a home in the next 6-12 months take the following steps:
Check for outstanding IRS or state balances
Request transcripts from the IRS to confirm all returns have been filed
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Settle or enter into a formal resolution, such as:
Installment Agreement - A structured monthly payment plan
Offer in Compromise - A potential settlement for less than what's owed
CNC status - Temporary pause in collections for those in hardship
"Lenders don't just want to see that you're aware of your tax debt-they want to see that you've taken responsible action to deal with it," added the Head of Client Solutions. "That's where we help."
Clear Start Tax: Helping Buyers Get Mortgage-Ready
Clear Start Tax works with clients at every stage of the homebuying process-from those just beginning to save for a down payment, to buyers whose pre-approvals were revoked due to IRS flags. The firm offers:
Full tax debt resolution services
IRS communication and compliance support
Fast-track options when timelines are urgent
Clear documentation to satisfy lender requirements
About Clear Start Tax
Clear Start Tax is a full-service tax liability resolution firm that serves taxpayers throughout the United States. The company specializes in assisting individuals and businesses with a wide range of IRS and state tax issues, including back taxes, wage garnishment relief, IRS appeals, and offers in compromise. Clear Start Tax helps taxpayers apply for the IRS Fresh Start Program, providing expert guidance in tax resolution. Fully accredited and A+ rated by the Better Business Bureau, the firm's unique approach and commitment to long-term client success distinguish it as a leader in the tax resolution industry.
Need Help With Back Taxes?
Click the link below:
https://clearstarttax.com/qualifytoday/
Contact Information
Clear Start Tax
Corporate Communications Department
seo@clearstarttax.com
(949) 535-1627
SOURCE: Clear Start Tax
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