According to an article in the Dallas Morning News, the IRS is softening some it's strategies for handling delinquent taxpayers and those who simply can't pay.
The article said:
"We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today," said IRS Commissioner Doug Shulman. "We want to go the extra mile to help taxpayers, especially those who've done the right thing in the past and are facing unusual hardships."
Some of the actions the IRS is taking are:
- Giving IRS employees more power to suspend collections on taxpayers who have experienced job losses . Although, this option has always been available not just to those who have experienced job losses; but other hardships such as a health crisis etc.
- Making installment plans more flexible and accommodating taxpayers who miss a payment or who need a reduced payment plan because of a job loss or other financial hardship.
- Releasing levies on a taxpayer's personal property (bank accounts, real estate, wages etc.) if is causing a financial hardship.
I suspect that with at least 6 million jobless Americans many people will be using these opportunities to handle tax obligations they simply can't pay. But just in case you find yourself unable to benefit from the IRS plans, you can use bankruptcy to repay taxes or even discharge them under certain circumstances.
A matter of fact, you may want to talk to a bankruptcy attorney before you go to the IRS about your tax debt so that you have a backup plan just in case they decide that your financial hardship isn't "hardship" enough to give you a break on your taxes.