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Delinquent Taxpayers Get Sympathy from an Unexpected Source

January 6, 2009 · 3 comments

Settling tax debts is not necessarily high on the list of taxpayers struggling to keep their homes and who may have lost their jobs. Delinquent taxpayers are, however, getting a little bit of sympathy… from the IRS.

The IRS Commish, Doug Shulman, who began his stint at the IRS in 2008, announced today that tax agents are being allowed some leeway in dealing with delinquent taxpayers. Shulman said, “It’s unrealistic to expect some taxpayers to make timely payments in this economy.”

This isn’t a free ride for delinquents, warns Shulman. Taxpayers seeking help will have to demonstrate hardship. Additionally, to qualify, taxpayers will need to remain compliant (meaning filing timely) and stay in communication with the IRS. You can’t hide from the IRS and expect sympathy.

This is consistent with the IRS’ announcement last month, when they announced that they would make it easier for homeowners with an IRS lien on their property to refi or sell.

Is this really the start of a kindler, gentler IRS? Are they really sympathetic? Or just realistic? I’m waiting to reserve judgment. I spoke with an IRS rep in the Offer in Compromise office last year who told me that there was increasing pressure to collect revenue – which translated into declining Offers and being grinchy on installment offers. But maybe the reality of a staggering 10 million Americans unemployed right now, Uncle Sam is finally softening up. Here’s hoping.

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{ 2 comments… read them below or add one }

1 Russell Cavanagh January 7, 2009 at 6:22 pm

Over here in the UK, local tax offices are usually happy to cut slack – including installment payments of unpaid tax – but once it gets passed to the central office, all sorts can happen … including bankruptcy …

Thanks for an interesting post.

All the best.

2 Kelly January 8, 2009 at 9:12 am

Thanks, Russell! In the US, bankruptcy does not generally eliminate your tax debts. Is that the case in the UK?

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