It seems that the Internal Revenue Service is starting to take note of the sluggish economy and its effect on taxpayers. Today, the IRS announced a major expansion of its "Fresh Start" initiative aimed at helping struggling taxpayers, by making Installment Agreements available to more taxpayers and providing new penalty relief to the unemployed.
IRS Commissioner Doug Shulman talked about the reasons for the expansion of the program saying, "We have an obligation to work with taxpayers who are struggling to make ends meet. This new approach makes sense for taxpayers and for the nation's tax system, and it's part of a wider effort we have underway to help struggling taxpayers."
The expansion significantly reduces taxpayer burden, by providing that taxpayers can now enter into Installment agreement of up to $50,000 without having to provide the IRS with their financial documents.
Taxpayers who owe up to $50,000 in back taxes will now be able to enter into a streamlined agreement with the IRS that stretches the payment out over a series of months or years. The maximum term for streamlined installment agreements has also been raised to 72 months from the current 60-month maximum.
The penalty relief to taxpayers falls into two broad categories:
- Wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to the April 17 deadline for filing a federal tax return this year.
- Self-employed individuals who experienced a 25 percent or greater reduction in business income in 2011 due to the economy.
To read the IRS press release in its entirety click here.