IRS Major Announcement
Today the IRS made a major announcement to help more middle class Americans. They are going to expand their federal tax forgiveness program. Traditionally, if one owes back taxes to the federal government, you either pay the full amount all at once, through a payment plan or by negotiating a reduction of the debt through what is commonly called an “offer in compromise”.
To qualify for an offer in compromise, you need to show doubt towards the collectability of the debt, whether because you lack the funds or more importantly that there is some dispute about the legitimacy of the debt.
It is said that through today’s announcement, the IRS is going to relax some of their criteria for the qualification of the Offer In Compromise procedures. We are going to have to wait to see if this truly helps people or not. If this is true then some people will be able to pay off their back taxes and pay off their local state taxes as well.