Just in time for the April tax deadline, the IRS has announced a new policy to help people who owe tax debts pay the money back. Under the agency’s new system, people with higher incomes and higher tax debts will qualify for payment plans and possibly avoid getting sued by the Feds.
“These steps are good for people facing tough times, and they reflect a responsible approach for the tax system,” IRS Commissioner Doug Shulman said in a press release.
One way the IRS pressures people to pay back taxes is to put a lien on taxpayers’ houses. For years, the agency placed a lien on a house once the taxpayer owed $5,000 or more. The agency announced it will double that threshold to $10,000. It also will make it easier and faster to remove liens from houses where taxpayers have fully repaid their tax debt.
The agency also is expanding its “Offers in Compromise” program, which gives people breaks on how much they owe. The program now will accept people with incomes up to $100,000, and it will double the maximum amount taxpayers can owe from $25,000 to $50,000.
A similar expansion will apply to small businesses. The maximum tax debt to participate in the compromise program will increase from $10,000 to $25,000. And small businesses will get up to two years to repay.
“We are trying to minimize burden on taxpayers while collecting the proper amount of tax,” Shulman said.
Image: Scott*Eric, via Flickr