Help For Financially Distressed Taxpayers From The IRS

If you are behind on tax payments there could be additional help available if you are facing an unusual hardship situation.

As the new tax filing season begins, the IRS is taking steps to help people who owe back taxes. The IRS can help in the following areas, to mention just a few:

Hardship Situation. Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in hardship cases where you are unable to pay. If you recently lost a job or face other financial problems, IRS assistors may be able to suspend collection in some situations without documentation to minimize the burden on you.

Home Equity Values in Flux Result in An Additional Review for Offers in Compromise: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than full amount owed, may be a viable option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. With the uncertainty in the housing market, the IRS recognizes that the real-estate valuations used to assess ability to pay are not necessarily accurate. So in instances where the accuracy of local real-estate valuations is in question or other unusual hardships exist, the IRS is creating a new, second review of the information to determine if accepting an offer is appropriate.

The IRS May Provide Added Flexibility Where Installment Agreement Payments Are Missed: The IRS is allowing more flexibility for individuals with existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship. Depending on the situation, the IRS may allow a skipped payment or a reduced monthly payment amount. If you are in this situation you should contact the IRS.

Speedier Levy Releases: The IRS will speed the delivery of levy releases by easing requirements on taxpayers who request expedited levy releases for hardship reasons. Taxpayers seeking expedited releases of levies to an employer or bank should contact the IRS number shown on the notice of levy to discuss available options. When calling, taxpayers requesting a levy release due to hardship should be prepared to provide the IRS with the fax number of the bank or employer processing the levy.

Prevention of Offer in Compromise Defaults: Taxpayers who are unable to meet the periodic payment terms of an accepted OIC will be able to contact the IRS office handling the offer for available options to help them avoid default.

To talk with a California tax attorney who can help solve your tax problem, call Mitchell A. Port at 310.559.5259.