On May 21, 2012 the Internal Revenue Service (IRS) announced a change in the terms of the Offer In Compromise presented to taxpayers to promote the ‘Fresh Start’ initiative. An Offer In Compromise is a leniency accessible to financially distressed taxpayers who meet certain guidelines. The new terms for the ‘Fresh Start’ initiative reflect the government’s attempt to help struggling taxpayers resolve their tax debt in 1 – 2 years, as opposed to 4 – 5 years.
The changes to be made to the guidelines for an Offer In Compromise include:
• Calculating a taxpayers future income will now include only one year if payment can be made in 5 months or fewer, or two years if payment will be made anywhere from 6 months to 2 years
• Taxpayers will now be allowed to pay student loans as part of their living expenses
• Taxpayers will be allowed to pay delinquent state and local taxes
• Taxpayers Allowable Living Expenses will be expanded to provide a more fair and consistent plan
To read more on this story visit: http://www.irs.gov/newsroom/article/0,,id=257542,00.html
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