Feed on
Posts
Comments
« Debt and Money ­­- Four Common Myths Debunked
Social Security a Ponzi Scam??? »
Popularity: 73% [?]

National Taxpayer Advocate IRS Tax Forgiveness??? Maybe Not

Jan 8th, 2009 by Kenny

Listening to CNN yesturday and going to the National IRS site I found some very interesting information on how the IRS is trying to help individuals that owe taxes but just don’t have the means to pay those taxes back during this difficult economic time.

Referencing the article by Nina Olson: National Taxpayer Advocate Urges Tax Simplification and Compassionate Treatment of Taxpayers Hit by Recession

She is urging the IRS to be a little more forgiving to tax payers that have been hit hard by the continued slump in the housing and employment markets.  In a report that she authored she outlines the serious misfoutune the taxpayers have burdaned upon them and urging Congress to greatly simplify the tax code so that individuals don’t have even more of a burdan thrust upon them after losing homes and their means of making an income.

In her report she outline three distint recommendations for struggling taxpayers.

  1. Instead of creating leans and taking individual home, concentrate on putting together programs that offer compromise and partial-payment installment agreements.  She believes this is a better approach to taking homes.  She references a study from the 2000 to 2007 records of home take.  She states, “The number of levies issued by the IRS increased by 1,608 percent from FY 2000 to FY 2007 — from 220,000 levies to about 3.76 million levies — yet the increase in the total collection yield during the period was slightly less than 45 percent.”
  2. Put together a simple plan for those who default on debts and still have an increasing tax bill.  Individuals that lose their homes to foreclosure, can’t pay their credit cards or pay their car notes have no idea that their delinquency may increase their tax liabilities.  Creditor write off debt when they have to foreclose on homes or close credit cards.  This canceled debt in most cases is shown as taxable income to the debtor.  And as such increases the tax bill.  Exclusions are available but they don’t come automatically.  The debtor will have to fill out tax form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), to claim an exclusion.  Olson recommends as stated in the report, “Olson recommends that Congress change the law to remove taxpayers with modest amounts of debt cancellation from the cancellation of debt income regime, and she recommends that the IRS develop an insolvency worksheet that taxpayers can file with their returns and create a centralized unit dedicated to handling cancellation of debt issues.”
  3. Here last recommendation is to implement a screen like the Taxpayer Advocate Service (TAS) to help individuals that are unable to pay their tax responsibility.

Popularity: 73% [?]

Debt Collection

Tags: , , ,

Posted in debt

Subscribe To My Feed Today





RSS feed | Trackback URI

Comments »

No comments yet.

Name (required)
E-mail (required - never shown publicly)
URI
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.