IRS eases up on delinquent taxpayers
St. Louis Post-Dispatch
February 24, 2011
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America's chief tax man was in nice-guy mode today, promising to loosen the screws on delinguent taxpayers.
IRS Commissioner Doug Shulman said the IRS will let taxpayers run up bigger tax bills before filing tax liens against their property. More taxpayers will also be eligible for a the IRS "offers in compromise" program, in which the IRS sometimes settles for less than the taxpayer owes.
"I always encourage employees of the IRS to try to walk in the taxpayers' shoes," Schulman told reporters in a teleconference today. He said the changes will help taxpayers get a "fresh start."
Under the new guidelines, the IRS will usually not file tax liens until delinquent debt tops $10,000, up from $5,000 presently.
The tax collectors will also generally withdraw liens when taxpayers agree to a direct-debit intallment agreement with debts of $25,000 or less.
A tax lien is a government claim against the taxpayer's property. It can effect credit reports, hurting a taxpayer's ability to obtain loans and find jobs.
Taxpayers with incomes up to $100,000 will be allowed to submit offers in compromise. The program will admit people who owe up to $50,000, up from the current $25,000 limit.
The IRS sometimes agrees to settle for lesser payments "once we determine that you can't pay now and there is no prospect of you paying it in the future," Shulman said.
Small businesses owing $25,000 or less can enter into installment payment agreements, up from the previous $10,000 limit.
Shulman said the changes will probably make no difference in the amount of taxes the government collects but might increase collections.
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