Received an IRS cp 59 letter requesting 1040 even though I didnt work ?

Deal Score0

I didnt work at all in 2007 (home maker between 97 until this year had a big med mal suit and also boyfriend was old fashioned and made me stay home and my grandparents gave me cash gifts.)
but i had bought a house with cash proceeds from a condo sale in late 2006
i had my first mortgage as of 2007. no doc loan. used cash from condo sale to pay for it for last 2 years.
now im single with no bf and I have learned job skills and started working again earlier this year.

so i guess mortgage interest was reported to irs and their computers flagged me

is this a big deal ?

or should i just send back their form and say i was unemployed ?

i notice someone else on yahoo answers asked a question about his young daughter receiving the same letter for 2007 return”
My 10 year old daughter recieved a IRS letter cp 59 for tax year ending 2007?
The only income she had was 597.00 long and short term capital gains. was she required to file? how should i respond?”


has something happened where irs is flagging anyone ?
even unemployed homemakers and 10 year olds ?


anyway how should i reply ?


Can anyone tell me if this is a good loan please take into consideration I have had a problem obtaining a loan due
them telling me my credit score is between 580-620
i have very little credit history and only a few debts due which are recent. This loan was offered by someone I know working
with mortgages. I also am applying for no doc loan as I have my own business but have very little business income to show and due to situation where my tax returns have been unfiled
pending proper execution of estate taxes and court settlements which will be reflected on my returns and lack of ability hire someone to complete the returns acurately
it was offered to me for a 200,000 loan
it says conventional fee simple purpose of loan purchase
interest rate 10.750 arm 5/1 no months 360/360
first mortgage payments monthly 1,866.96 estimated prepaid items 1,791.67 which is interest for 30 days @ 69.7222 per day estimated closing costs 12,914.00 cash from /to borrower

  1. Reply
    February 10, 2011 at 1:35 am

    No the IRS isn’t flagging everyone, just people where the info reported to them doesn’t sound reasonable.

    The letter your daughter got was probably a different letter and due to the capital gains – if the total sale price gave her a filing requirement and she didn’t file, the IRS doesn’t know the total sale price wasn’t a gain.

    You can send back your letter and say you were unemployed. They will want to see where your income DID come from though, they won’t just drop it. You might end up with a “lifestyle audit” where they examine your spending and look at your bank records and verify where your income came from.

  2. Reply
    v b
    February 10, 2011 at 2:08 am

    You often get a CP59 when you filed for an extension and then didn’t file.

    Or make estimated tax payments.

    Or have stock sales that need to be reported on a schedule D.

    Or have substantial mortgage interest paid with no apparent income.

    If it’s the last, write and say you’ve been living on savings.

  3. Reply
    sarah jane
    February 10, 2011 at 2:32 am

    This loan will be fixed for five years and then will begin to adjust. Before you move forward you need to know:

    1- Is there a prepayment penalty? if so, what are the terms? Will it be charged even if you decide to sell this property (called a ‘hard’ prepay).

    2- What kind of ARM is it? What is the margin? What index is the loan based on?

    As question I have for you: do you own this property outright? Because it appears that you are not paying off any debts through this loan. If there are any mortgages or other liens, they will have to be satisifed first and you won’t get $ 185,294 at closing.

    If you do own this property outright, think long and hard about the payment you are about to take on and whether you can comfortably afford it. Also, determine how your payment will adjust when it starts to adjust, or you could be in for a rude awakening when five years goes by (seems like it’s far away now, but when that payment comes due it will be very real).

    Honestly, I am shocked you are able to get a no doc loan right now. I don’t know of any lenders offering them, although I suppose there might be someone out there who still has money to lend for this kind of thing.

  4. Reply
    February 10, 2011 at 3:26 am

    In this market you are lucky to get a no-doc with your fico and credit history. Make sure you inform your loan officer of your tax situation. Most lenders require a “4506” executed prior to releasing docs or at the closing table. If the report from the IRS reflects no taxes file this could hold up your closing.

  5. Reply
    eric c
    February 10, 2011 at 4:08 am

    For the love of god please don’t do this. I assume you live in the USA. Maybe you have heard in the new all of the problems with sub-prime adjustable rate mortgages. I am surprised that someone is still willing to give you a loan of this type. You are going to pay $ 14,706 in fees to get a 10.75% ARM (sounds like a bad deal to me). How much are you going to put down/ or how much equity do you have in it right now? If you have no equity or no money down, what are you going to do if you have to sell in a year or two or three? This loan is a recipe for foreclosure. You are better off waiting until you are in a better position to qualify for a better loan. In the mean time clean up you credit issues, and get your business off the ground and in good shape.

    When I bought my first house in was a similar amount that you are requesting and my fees were much, much lower. Check out this link and click on the state you live in to get the average closing cost for your state for a $ 180K loan (the amount you are looking at is a little different but can give you a good basic comparison). Your closing cost is way above average.

    Sometimes waiting for what you want makes it that much more special when you finally get it. Don’t get a bad loan so you can have what you want right now, chances are you will have it taken away from you which will be worse than never having it in the first place.

  6. Reply
    James William
    February 10, 2011 at 4:58 am

    Hello Everybody,

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    My happiness now is that i have not only gotten the loan(€ 15,000 Pounds) to pay my tuition them Harvey Loan Inc, piloted by Mr, Patrick Harvey, i have also been able to establish a chaned to allow me collect money at very low competative interest rate.
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