Arizona Tax Lawyer Blog

The IRS issued a statement recently claiming that it is aware of the economy and it's affects on taxpayer's income, home values, and ability to pay debt overall. It has laid out three ways that it is going to try and help.

First, the IRS is offering to be more lenient with those who have recently lost a job, rely on social security, welfare or who have large medical bills. It will not be calling these people or sending them letters.

The IRS already has a program that allows taxpayers without income or with "low" income to be placed on "non collectible" status. This means that they are left alone by the collections department of the IRS until the income situation improves. This new leniency in relation to collections appears to be expanding the realm of those who may qualify for this treatment.

Second, the IRS is going to allow those that are in an installment agreement arrangement to miss a few payments and stay in the arrangement if they have been steady payers.

The installment agreement program has long been in existence. Previously, if a taxpayer missed a payment during the plan, the IRS would withdraw the plan and the full amount would become due. They would however, typically allow the plan to be re-instated with a fee.

Third, the IRS is promising to review the valuations of homes in cases where the taxpayer is filing an offer in compromise.

Normally, in an offer in compromise, the IRS would require the payment of any equity in a home as part of the settlement. Many homes have little or no equity now, but the IRS systems may be showing the valuations based on previous years. This will help more offers to be accepted.

If you have a serious tax debt and are facing IRS collection activity, please call Arizona tax attorney Michael Anderson at 480 507 5985 for a straightforward evaluation of your options.