IRS revised rules is making more flexible terms to its Offer-in-Compromise Program so that  some financially distressed taxpayers can clear up their tax problems quicker.

What is an offer-in-compromise (OIC)?

An OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to determine the reasonable collection potential.

This initiative focuses on the financial analysis used to determine which taxpayers qualify for an OIC.

Here are some of the changes:

• Reducing the number of years in the calculation for a taxpayer’s future income. 
• Reducing the time it will take to paid in full the amount due. 
• Allowing taxpayers to repay their student loans Minimum payments on college student loans guaranteed by the federal government.
• Allowing taxpayers to pay state and local delinquent taxes. 
• Expanding the Allowable Living Expense allowance for basic necessities for citizens in similar geographic areas. 

More information on the “Fresh Start” initiative can be found at IRS.gov. or from your CPA professional of choice. 

(Source: http://www.IRS.gov)

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