The IRS has finally done it. I never thought it would happen. I have been 38 years in the tax resolution business and have worked directly for the IRS 10 of those years and I still could not believe the new policy change made this month by the IRS.
For years the IRS have been killing taxpayers with the filing of the federal tax liens. Every time you turned around, no matter what the dollar amount owed, the IRS was filing millions of tax liens. Over the past 3 years the IRS has filed over 2 million federal tax liens. Staggering!
The IRS has ruined the credit score of millions of taxpayers with the filing of the federal tax liens. Even if taxpayers wanted to pay off their debt, the filing of the federal tax lien killed their credit score.
Finally Washington got the message. Help us, not hurt us. They listened.
The name of the new program is Fresh Start.
The IRS wants to give taxpayers a Fresh Start. They announced on Feb.24th major changes to the federal lien policies. The decades old policies are being revised to help the taxpayers with unnecessary burdens of the having their credit ruined by the filing of the federal tax liens. This will effect taxpayers with relatively low tax balances.
So what are these new changes coming down the pike to help those with IRS tax debt? Here are some of the changes IRS announced.
The IRS will significantly increase the dollar thresholds when federal tax liens are filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, federal tax liens are automatically filed any time a taxpayer has a tax debt of $5000 dollars of more.
The IRS will use the Direct Debit Installment Agreements as a vehicle to put this policy in effect. It will protect the governments interest and insure payments. More to follow on this exact procedure.
For taxpayers with IRS tax debt and with unpaid assessments of $25,000 or less, the Internal Revenue Service will now allow federal tax lien withdrawals under several scenarios.
1. Federal Tax Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement. The IRS will withdraw a federal tax lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
2. The IRS will also withdraw federal tax liens on existing Direct Debit Installment agreements upon taxpayer request. Federal Tax Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored. More on this a the guideline develop.
New policy changes to Installment Agreements or payment agreements for small businesses
Taxpayers with small businesses with $25,000 or less in unpaid tax can participate. As it stands now, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.
The streamlined installment agreements or payment agreements will be available for small businesses that file either as an individual or as a business. Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less. We are not sure of the start date on this procedure at this time. Again, more to come.
Small businesses will need to enroll in a Direct Debit Installment Agreement to participate. As more news breaks on this we will inform our reader base.
There will also be changes to the Offers in Compromise Program.
In addition, the IRS is expanding a new streamlined Offer in Compromise program to cover a larger group of struggling taxpayers.
This streamlined OIC is being expanded to allow taxpayers with annual incomes up to $100,000 to participate. In addition, participants must have tax liability of less than $50,000, doubling the current limit of $25,000 or less.
As these current changes unfold contact a true professional tax firm for more details.
