“The IRS Announced a New Effort to Help Struggling Taxpayers” by Frank C. Carnahan

The IRS announced a series of new steps to help struggling individual and small business taxpayers get a fresh start and meet their tax obligations:

• Significantly increasing the dollar thresholds before liens are generally filed
• Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it, and the IRS will streamline internal procedures to allow collection personnel to withdraw liens
• For taxpayers with unpaid assessments of $25,000 or less, the IRS will allow lien withdrawals under several scenarios:
  • entering into a Direct Debit Installment Agreement
  • conversion of a regular Installment Agreement to a Direct Debit Installment Agreement
  • on existing Direct Debit Installment agreements on taxpayer request
• Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored
• Raising the dollar limit to allow more small businesses (filing either as an individual or as a business) to use streamlined Installment Agreements (a Direct Debit Installment Agreement is required):
  • $25,000 or less (Currently, $10,000) in unpaid tax can participate
  • Liabilities over $25,000 can be paid down to less than $25,000 to participate
  • Allowing 24 months to pay
• The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to include taxpayers with:
  • annual incomes up to $100,000
  • tax liability of less than $50,000 (doubling the current limit of $25,000 or less)

Note: Taxpayers can use the Online Payment Agreement application on http://www.IRS.gov to set-up Direct Debit Installment Agreements. See IR-2011-20 for more http://www.irs.