96% Average Client Savings
Home » Tax Relief Blog

IRS Expands Streamlined Offer in Compromise Program

Submitted by admin on Thu, 3/3/2011 - 12:00 am

In an effort to help more struggling taxpayers, the IRS has announced that they will be focusing more on helping individuals and small businesses meet their tax obligations, past and present, by implementing new policies and programs to help taxpayers resolve back taxes and avoid tax liens.

“We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start”, IRS Commissioner Doug Shulman said, “These steps are good for people facing tough times, and the reflect a responsible approach for the tax system.”

We have been watching this closely at Tax Tiger, because the IRS said something similar in 2008 with regards to helping struggling taxpayers and there was to be a kinder and gentler IRS, but we saw none of that, in fact, we saw quite the opposite. This announcement comes after a review of internal IRS collection operations upon receiving input from the IRS Advisory Council and the National Taxpayer Advocate.

The newly expanded “streamlined Offer in Compromise (OIC) program” will allow taxpayers with annual incomes of up to $100K to participate, but those participating in the streamlined program must have a tax liability of less than $50K in tax debt. This doubles the current limit of $25K in tax debt for the previous streamlined Offer in Compromise program.

Collections are still at an all time high, and the IRS announced it would be hiring many new agents in the coming months. However, with this said, we have seen in the few weeks since this announcement, that the IRS has began approving Offer in Compromises that fall within their new expanded definition of “streamlined”, and this is a very good thing. We will be monitoring this program expansion closely in-house with our clients, as well as receiving input from others in the industry.

Full IRS announcement can be read here.