IRS Expands Tax Debt Relief Programs

IRS Expands Tax Debt Relief Programs

The IRS recently introduced the Taxpayer Relief Initiative, a new program aimed at assisting taxpayers who are struggling to pay their taxes due to the pandemic.

While taxpayers who owe taxes have traditionally had options like installment agreements and offers in compromise, they now have even more choices. (IRC-2020-248)

Here are the key features of the Taxpayer Relief Initiative according to the IRS:

- Taxpayers who qualify for a short-term payment plan option can now have up to 180 days to settle their tax liabilities, an extension from the usual 120 days.

- The IRS will offer increased flexibility for taxpayers who are temporarily unable to meet the payment terms of an accepted offer in compromise.

- The IRS will automatically add certain new tax balances to existing installment agreements for individuals and business taxpayers who have ceased operations, preventing them from defaulting on their agreements.

- Certain qualified individual taxpayers who owe less than $250,000 can set up installment agreements without needing to provide a financial statement or substantiation if their monthly payment proposal is adequate.

- Some individual taxpayers who owe only 2023 taxes and less than $250,000 may qualify to establish an installment agreement without the IRS filing a Notice of Federal Tax Lien.

- Qualified taxpayers with existing direct debit installment agreements may now use the online payment agreement system to propose lower monthly payment amounts and change their payment due dates.

- Taxpayers who cannot pay can contact the IRS to request a temporary halt in collection efforts, which the IRS will grant if the taxpayer is currently unable to pay.

Navigating these various guidelines can be confusing, and IRS instructions are often difficult to understand. While there are fees associated with hiring a tax professional, it may save you both money and time.

“When you’re dealing with the IRS, it’s almost always worth it to get professional help from a tax attorney or enrolled agent. The same exact case and be accepted or denied by different IRS examiners — it’s all in the presentation,” said Michael McKeon, CEO of SoNerdly, a financial services comparison website for consumers.


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