The Internal Revenue Service (“IRS”) announced a major expansion of its “Fresh Start” initiative to help struggling taxpayers by taking steps to provide new penalty relief to the unemployed and making Installment Agreements available to more people.
The changes include:
- Certain taxpayers who have been unemployed for 30 days or longer will be able to avoid failure-to-pay penalties. A six-month grace period on failure-to-pay penalties will be made available to certain wage earners and self-employed individuals. The request for an extension of time to pay will result in relief from the failure to pay penalty for tax year 2011, but only if the tax, interest and any other penalties are fully paid by Oct. 15, 2012.
- The IRS is doubling the dollar threshold for taxpayers eligible for Installment Agreements to help more people qualify for the program. The IRS announced today that the threshold for using an installment agreement without having to supply the IRS with a financial statement has been raised from $25,000 to $50,000, and the maximum term for streamlined installment agreements has also been raised to 72 months from the current 60-month maximum.
If you would like to discuss either of these programs, please feel free to contact us to discuss your eligibility.