Today, the Internal Revenue Service announced that new rules have been implemented that will make things easier for taxpayers who are having a difficult time paying back debt owed to the IRS. Here they are:
- The threshold for tax liens will be doubled from $5,000 to $10,000, which means the IRS won't file a lien unless your unpaid taxes are more than $10,000. The liens give the IRS the ability to claim a taxpayer's property for the amount they owe.
- Lien withdrawals would be easier for taxpayers to obtain after they pay their tax debt, which is better for credit scores. Previously, the IRS would not fully withdraw the lien. You qualify for a lien withdrawal if you owe less than $25,000 or if you have agreed to a direct debit installment agreement, which involves monthly payments directly withdrawn from your bank account.
- The Offer in Compromise program will be expanded to cover more taxpayers. The program lets people settle for less than the amount owed if they can't pay back the debt. People who make over $100,000 can now partake in the program if they owe less than $50,000. Previously, the limit was a $50,000 income and a $25,000 debt.