IRS Offers New Help to Struggling Taxpayers - Fresh Start for Federal Tax Liens

Tough times are all around, and apparently the IRS recognizes this as well.  The IRS recently announced a series of new initiatives to " to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. "

The changes center around how the IRS files liens against taxpayers for failure to pay their taxes, and include 5 key provisions:

  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.  This is being done to address inflation.
  • 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.  This will apply to taxpayers with $25,000 or less of unpaid taxes, interest and penalties who have entered into a payment plan with the IRS.  You can see a video about the Direct Debit Installment Program here.
  • Creating easier access to Installment Agreements for more struggling small businesses.  This will be done by increasing the program participation threshold of unpaid  taxes, interest and penalties from $10,000 to $25,000.
  • Expanding a streamlined Offer in Compromise program to cover more taxpayers.  The income limits will be increased to $100,00, and the tax liability threshold doubled from $25,000 to $50,000.

A federal tax lien is a tool of the IRS whereby they have a legal claim to the property of a taxpayer who has not paid their taxes. It includes all property owned by the taxpayer at the time filed or after acquired.  Needless to say, a federal tax lien dramatically decreases your credit worthiness.

Questions on addressing federal tax liens are handled through the Firm's Tax Department, or complete a request for more information to the right ------>