The IRS announced on March 7, 2012, that they had made expansions to their penalty relief and payment program known as The Fresh Start Initiative. Below is a summary of key expansions:
This relief allows for a six-month grace period to allow taxpayers to pay their taxes without being charged the failure-to-pay penalty. Individuals granted this extension will have until 10/15/12 to pay their 2011 tax, interest, and other penalties in full without being charged the penalty.
- Available to two categories of taxpayers: Those who have been unemployed for 30 consecutive days in 2011 or 2012 (up to the 4/17 tax filing deadline) and self-employed people who have experienced a 25 percent or greater reduction in business income in 2011, due to the economy.
- If you’re interested in filing for this extension you must complete Form 1127A.
Taxpayers who owe $50,000 or less in back taxes have the opportunity to pay their debt over the course of several months or years.
- The IRS raised the threshold from $25,000 to $50,000 for using installment agreements without having to present financial statements.
- You must file Form 433-A or Form 433-F.
Offers in Compromise
This part of the relief program aims to help those struggling the most by reducing a taxpayer’s liabilities for less than what is owed.
For the complete details visit the IRS Website.
If you have questions, or would like to discuss whether this relief program is right for you, contact your H&S tax professional today at 1.800.924.6891.