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IRS Plans to Help Unemployed Taxpayers

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Washington, D.C. (March 9, 2010)

The Internal Revenue Service intends to take several additional steps this tax season to help people who are having trouble meeting their tax obligations because of unemployment or other financial problems.

Doug Shulman

The steps — an expansion of efforts that began more than a year ago — include additional flexibility on offers in compromise for struggling taxpayers, a series of Saturday “open houses” offering taxpayers extra opportunities to work out tax problems face to face with the IRS, special outreach with partner groups to unemployed taxpayers and the availability of more information on a special section of the IRS Web site.

“Times are tough for many people, and the IRS wants to do everything it can to help people who have lost their job or face financial strain,” said IRS Commissioner Doug Shulman in a statement.

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IRS employees will be permitted to consider a taxpayer’s current income and potential for future income when negotiating an offer in compromise. Normally, the standard practice is to judge an offer amount on a taxpayer’s earnings in prior years. This new step provides greater flexibility when considering offers in compromise from the unemployed. The IRS may also require that a taxpayer entering into an offer in compromise agree to pay more if the taxpayer’s financial situation improves significantly.

In addition, the IRS will hold hundreds of special Saturday open houses to give struggling taxpayers more opportunity to work directly with IRS employees to resolve issues. The offices will be open on March 27 and three additional Saturdays in the spring and early summer. Dates, times and locations will be announced shortly.

During the expanded Saturday hours, taxpayers will be able to address economic hardship issues they may be facing or get help claiming any of the special tax breaks in last year’s American Recovery and Reinvestment Act, including the homebuyer tax credit, American Opportunity Credit, Making Work Pay credit and expanded Earned Income Tax Credit.

The IRS is working and coordinating with state departments of revenue and state workforce agencies to help taxpayers who are having problems meeting their tax liabilities because of unemployment or other financial problems. These coordinated efforts may include opportunities for taxpayers to make payment arrangements and resolve both federal and state tax issues in one place.

Taxpayers who are unemployed or struggling financially can find information in a new electronic tax center on the IRS Web site, IRS.gov. This online tax center has numerous resources including links to information on tax assistance and relief to help struggling taxpayers.

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