In addition to providing new penalty relief to the unemployed and offering a more relaxed installment agreement policy, the IRS has expanded the terms in its Offer-In-Compromise program – making it even easier for taxpayers to settle back taxes.
These new rules, which focus on altering the financial analysis used in determining which taxpayers qualify for an Offer-In-Compromise, are intended to help distressed taxpayers resolve tax issues even quicker.
The revisions made:
- When calculating a taxpayer’s future income, the IRS will look at only 1 year of future income, as opposed to 4 years, to determine the amount paid in offers that are to be paid in 5 or fewer months. Along those same lines, the IRS will look at only 2 years of future income, instead of 5 years, for offers that are to be paid in 6 to 24 months.
- Taxpayers who owe student loans from their post high school education will now be able to pay minimum payments, guaranteed by the federal government.
- In certain circumstances, those who owe delinquent federal state or local taxes and do not have the means to fully pay the liabilities will have the option of a monthly payment plan.
- The IRS has expanded the allowable living expense allowance to now cover expenses such as credit card charges and bank fees and charges. The previous allowable living expense allowance was intended to solely be used for basic necessities.
These revisions will allow more struggling taxpayers to qualify for Offers-In-Compromise and help them move closer to a debt-free life.
If you have any questions and owe $10,000 or more in back taxes to the IRS, call 877-829-3535 and let the seasoned attorneys at US Tax Shield help you successfully settle back tax issues with the IRS.