Early this year, the IRS has added a new strategy to the collection efforts and that is filing tax liens.
Instead of the usual phone calls or demand letters, they send notifications that the US of A is a priority against other creditors.
This simply means that as the property against which is lien is filed gets sold; the government will get paid before anyone else.
The IRS says that such moves should allow people with back taxes.
The beneficiaries would be low-income taxpayers and those with small businesses.
The IRS has instituted the following when it comes to some collection efforts:
It may take some time for the implementation to get successful but at least the US government is helping its people get along with the financial crisis that the world is having at the moment.
Instead of the usual phone calls or demand letters, they send notifications that the US of A is a priority against other creditors.
This simply means that as the property against which is lien is filed gets sold; the government will get paid before anyone else.
The IRS says that such moves should allow people with back taxes.
The beneficiaries would be low-income taxpayers and those with small businesses.
The IRS has instituted the following when it comes to some collection efforts:
- A significant increase in dollar threshold will be made when liens are filed.
The current practice is that there are dollar levels that are automatically applied for people filing with past-due balances.
With an increase in dollar threshold this keeps pace with inflation and makes sense for the system.
One significant meaning for this is that people will no longer be burdened by liens and this does not affect the financial risk to government. - Taxpayers who owe $25,000 or less will find it easier to withdraw the lien provided they agree to pay through a direct debit installment place.
The plan is for payments directly paid to the IRS instead of a check every month.
When the plan is set up the lien will be released or withdrawn. - The IRS raises the dollar limit of its payment rule to those who owe $25,000 or less.
This allows small businesses to participate since the current rule is only for those who owe $10,000 or less can avail of the installment plan.
This Direct Debit Installment Agreement will allow the taxpayer to pay off the debt by 2 years. - A new Offer in Compromise or OIC agreement is established to cover a significant number of taxpayers who are struggling with payments.
The OIC is an agreement between IRS that stipulates that the debt amount will be lesser. - The annual income has been increased to $100,000 to allow more taxpayers to avail of the new tax rulings.
- The tax bill amount eligibility for availment of the program has doubled from $25,000 to $50,000.
It may take some time for the implementation to get successful but at least the US government is helping its people get along with the financial crisis that the world is having at the moment.