6 Ways the IRS is Helping Tax Payers in Trouble

Ever notice that if you put together “the” and “IRS,” you get “theirs?”

Historically, the IRS has been rigid about getting “theirs,” but it turns out that the taxman has a heart after all – at least for the time being.

As a result of the steepening economic recession, the IRS is taking firm steps to ease the financial load on overburdened Americans.

“With so many people facing financial difficulties, we want taxpayers to get all the tax credits they’re entitled to,” said IRS Commissioner Doug Shulman in a statement. “In addition, we are creating new protections to help people trying to meet their tax obligations. The IRS will do everything it can to help during these tough times...to help taxpayers, especially those who’ve done the right thing in the past and are facing unusual hardships.”

In early January, the agency issued a fact sheet detailing some new initiatives geared to give taxpayers some breathing room this year. Here are some highlights:

1. Broad strokes: IRS staffers now have greater flexibility to work with financially struggling taxpayers. IRS customer representatives can adjust payments for back taxes, hold back on issuing default notices on payment agreements, and work with taxpayers to better manage tax liens.

2. Postponement of collection actions: IRS employees also now have greater authority to suspend collection actions in certain hardship cases. This includes instances when the taxpayer has recently lost a job, is relying solely on Social Security or welfare income or is facing devastating illness or significant medical bills. If an individual has recently encountered this type of financial problem, IRS assistors may be able to suspend collection without documentation to minimize burden on the taxpayer.

3. Added flexibility for missed payments: The IRS is allowing more flexibility for previously compliant individuals in existing installment agreements who have difficulty making payments because of a job loss or other financial hardship. The IRS may allow a skipped payment or a reduced monthly payment amount without automatically suspending the agreement. Taxpayers in a difficult financial situation should contact the IRS.