Recently, the IRS announced they would be making slight changes to the Offer in Compromise program, which stands to be of great benefit to taxpayers who are facing financial hardship due to unemployment, underemployment or other factors which have affected their income.
The IRS has permitted employees to consider a taxpayer’s present income and potential for future income when negotiating an offer in compromise. The normal procedure is to judge all offers based on the taxpayer’s earnings in years prior to the offer being made. This new procedure will allow for greater flexibility on the part of the IRS when considering offers in compromise from unemployed taxpayers. It is important to note that a taxpayer entering into such an offer will agree to pay more if their financial situation improves significantly after the offer is accepted by the IRS.
The IRS is offering other outreach efforts to assist the unemployed. Working and coordinating with state departments of revenue and state workforce agencies, the IRS is trying to help taxpayers having trouble meeting their tax liabilities due to unemployment or other financial issues. According to the IRS, these coordinated efforts may include opportunities for taxpayers to make payment arrangements and resolve both state and federal tax issues all in one place.
In addition to the changes the IRS is making with the OIC program, the IRS will begin holding hundreds of Saturday open houses to give struggling taxpayers more opportunities to work directly with IRS employees to resolve their back tax issues. The offices will be open on March 27 and three additional Saturdays in the spring and early summer. Dates, times and locations will be announced shortly.
During the expanded Saturday hours, taxpayers will be able to address economic hardship issues they may be facing or get help claiming any of the special tax breaks in last year’s American Recovery and Reinvestment Act, including the:
* Homebuyer tax credit
* American Opportunity Credit
* Making Work Pay credit
* Expanded Earned Income Tax Credit
As always, taxpayers can take advantage of toll-free telephone assistance and regularly scheduled hours at local Taxpayer Assistance Centers. Taxpayers can find the location, telephone number and business hours of the nearest assistance center by visiting the Contact My Local Office page on IRS.gov.
Lastly, taxpayers who are unemployed or struggling financially can find information on a new page on the IRS Web site, www.IRS.gov. This online tax center has numerous resources including links to information on tax assistance and relief to help struggling taxpayers.
Posted by JK Harris