January 7, 2009 12:00 am

IRS Help for Financially Distressed Taxpayers

A kinder gentler IRS? Maybe? The IRS is providing help for taxpayers who owe taxes, with Commissioner Doug Shulman saying, “We want to go the extra mile to help taxpayers, especially those who’ve done the right thing in the past and are facing unusual hardships.” Help includes:

  • Postponing collection actions
  • Adding flexibility for missed payments on installment agreements
  • Providing additional review for offers in compromise with respect to home values
  • Preventing offer-in-compromise defaults
  • Expediting levy releases for hardship reasons

Most of these actions, however, require the taxpayer in financial distress to contact the IRS and ask for help; the IRS will not necessarily provide this help on its own.

Delivery of Refunds

The IRS has also promised to speed tax refunds this year and advises taxpayers to check on their eligibility for new tax breaks for 2008, including the first-time homebuyer credit and the rebate recovery credit (for those who did not receive their full benefit as an economic stimulus payment).

E-filing the return and requesting that refunds be deposited directly into an eligible account (e.g., bank account, IRA, health savings account) can help to ensure prompt receipt of tax refunds.

Source: IR-2009-02, 1/6/08

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Tax Glossary

Dependent

A relative or household member for whom an exemption may be claimed.

More terms