IRS Announces New Effort to Help Struggling Taxpayers


The Internal Revenue Service announced a series of new steps to help people get a fresh start with their tax liabilities involving changes to tax liens, installment agreements and offers in compromise. Tax Liens: The IRS announcement concerns changes to its lien filing practices that will lessen the negative impact on taxpayers. The changes include:


•Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.

•Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.

•Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.

•Creating easier access to Installment Agreements for more struggling small businesses.

•Expanding a streamlined Offer in Compromise program to cover more taxpayers.


The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, liens are automatically filed at certain dollar levels for people with past-due balances.


The IRS will also modify procedures that will streamline its internal procedures to allow IRS collection personnel to withdraw the liens once full payment of taxes is made by the taxpayer.


The IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement (DDIA). For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow a lien withdrawal if a taxpayer enters a Direct Debit Installment Agreement. The Federal Tax Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored. The streamlined Installment Agreements will be available to more small businesses. The payment program will raise the dollar limit to allow additional small businesses to participate. (Small businesses with $25,000 or less in unpaid tax can participate. Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay).


The IRS is also expanding a new streamlined Offer in Compromise (OIC) 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.


If you would like more details, please do not hesitate to call our office. Our office has been successful in helping taxpayers with IRS and IDOR collection problems for over 19 years. Please call our office and ask for Dan at (847) 705-7555 to talk to one of our attorneys in the tax practice group and find out how we can help your client in front of IRS collections.