The IRS is making it easier for middle- and low-income taxpayers to pay off their tax bills, the agency announced Monday.Under its Offer in Compromise program, the IRS will let taxpayers who are paying off student loan debt and state and local taxes arrange smaller payments to the IRS.
“This phase of Fresh Start will assist some taxpayers who have faced the most financial hardship in recent years,” IRS Commissioner Doug Shulman said in a statement. “Thus this program is set to help more people in the middle class than ever before.”
The program typically lets cash-strapped taxpayers settle their tax claims for less than the full amount owed. The usual requirements have been slackened now, such as only looking at one year of future income for payment plans fewer than five months (down from four years) and two years of future income for payment plans between six and 24 months (down from five years).
This should help unemployed taxpayers by not factoring in what their ability to pay will be if they return to work or get a higher-paying job.
To qualify for the OIC program, the IRS requires that taxpayers are current with all filings and payments and are not currently going through bankruptcy. Once admitted into the program, the only thing that you need to do to remain in is promise to file and pay your taxes for the next five years.
So, if you are feeling the pressure this year’s tax bills, visit www.irs.gov to see if you qualify.
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