The IRS just announced it’s “Fresh Start” program. I know what you are thinking, because I thought the same thing. IRS and “Fresh Start” are two phrases that don’t exactly go together. But in a continued effort to seem friendlier, they have rolled out a new program. Below are some of the highlights.
Failure-to-pay Penalties Waved for Unemployed
If you meet the following qualifications, you will get a six-month grace period on failure-to-pay penalties.
- Employee who was unemployed for at least 30 consecutive days between January 1, 2011 and April 17, 2012, or
- Self-employed with a 25% or higher reduction in business income in 2011.
- Income does not exceed $200,000 if filing joint, or $100,000 for single or head of household.
- 2011 tax due does not exceed $50,000.
To get the penalty relief, a form 1127A will need to be filed.
Streamlined Installment Agreements
“Fresh Start” will allow taxpayers with up to $50,000 of tax due to apply for simpler installement agreement. Payments will have to be paid over 72 months and financial statements will not have to be supplied to the IRS.
To apply, fill out forms 433-A or 433-F.
Offers in Compromise
For taxpayers that can’t afford to make intallement payments, the IRS is offering a streamlined Offer in Compromise program that can settle the tax liabilities for less than the full amount owed.
Do these changes help give the IRS a friendlier face, you be the judge. At a minimum, it is good to see that the IRS is trying to be understanding of the tough economic situation that many people are finding themselves in.