IRS offers help paying taxes

(Brendan Smialowski/bloomberg News)
By Michelle Singletary
Washington Post Staff Writer
Sunday, March 14, 2010

For the second year, the Internal Revenue Service is reaching out to folks in financial trouble.

The agency will hold 1,000 open houses on Saturdays where taxpayers can work out payment problems with IRS officials.

Commissioner Douglas Shulman's goal is to let people know the IRS is concerned about those in financial distress.

When you have 140 million individual tax returns, "you need to be continually looking at ways to serve people," Shulman said. "This effort continues my theme that we have to walk in taxpayer shoes. There are still a lot of people who are unemployed facing hardship."

Last year, the IRS gave its front-line employees the authority to be easier on people having difficulty paying their taxes because of the financial crisis. In some circumstances, collection efforts were halted. In other cases, people with installment agreements for overdue tax debts were allowed to skip a payment or reduce their monthly payments.

This tax season, Shulman said, if individuals and small-business owners bring all their information to an open house, they should be able to walk out with their tax issues resolved. The open houses will be staffed with IRS personnel from various departments, including examinations, collections and appeals.

"Our goal is for people to walk out clean," Shulman said. "And by clean, I mean you walk out knowing what you owe, or if you need a settlement offer, it's on the table. If you are in appeal, that is over. If you are trying to get an installment plan, you are done. This, frankly, is good for taxpayers and good for us. We want to wrap these things up and move on."

The open houses will begin Saturday, March 27. Check for a full list of dates, times and places.

Additionally, the IRS is relaxing its income requirement to qualify for an "offer in compromise," or OIC. This is an agreement between a taxpayer and the IRS that settles a person's debt for less than the full amount owed. IRS employees will be allowed to consider a taxpayer's current income and potential for future income when negotiating an OIC.

Under regular guidelines, the reduction in the tax debt is weighed against a taxpayer's earnings in prior years.

"It's a big shift," Shulman said. "This will allow thousands more in the [OIC] program."

There is a caveat to this assistance. If your economic situation changes, the IRS may revisit the offer in compromise.

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