Michael Nickerson CPA, MSFP: If you can't pay- New options from the IRS
What happens when taxpayers are unable to pay their taxes? They may make an agreement with the Internal Revenue Service called an offer in compromise to settle the bill. This only happens when the IRS is convinced that the taxpayer cannot pay the full amount, even in installments, or that it would cause extreme hardship.
The IRS is now making changes that should make it easier for more taxpayers in financial difficulty to qualify by changing the way it looks at their ability to pay. It will consider one year's future income, instead of four years, if the offer is to be paid in five months or sooner, or two years instead of five, if the offer will be paid in 6 to 24 months. All offers must be paid within 24 months of IRS' acceptance of the taxpayer's offer. In evaluating ability to pay, the IRS is expanding its allowance for living expenses, including such costs as student loan and credit card payments and bank fees and any other delinquent taxes.
Best wishes for a simply super 2013.
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