IRS cuts the recession-ridden a little bit of slack
Would you believe a kindler, gentler Internal Revenue Service?
The agency says it is cutting some slack now for those who owe back taxes given the economic turmoil. Among the promised changes:
* Suspension of collection actions if you lost a job, rely solely on Social Security or welfare income, suffer a "devastating illness" or have huge medical bills.
* More flexibility if you can't keep up with your installment payments on back taxes because you lost your job or had some other hardship. You might be able to skip a payment or make lower monthly payments. This flexibility will be offered to those who have kept up with payments previously.
* A second review of home values during an "Offer in Compromise." An Offer in Compromise is where you make an offer to the IRS to settle your tax debt for less than you owe. Before it accepts, the IRS considers the value of real estate you own to determine your ability to repay. But with housing prices so uncertain now, the IRS says it will give another review of this information if real estate values in your area are in doubt.
For help, call the IRS at the number listed on the agency's correspondence to you or 800-829-1040.
Also, check out "What If?" at www.irs.gov to find out the tax implications of losing your job, filing for bankruptcy, receiving unemployment compensation and other matters.