IRS Collection Financial Standards expense limits increase
In late March/early April of each year, the IRS updates a set of standards it uses to help determine a taxpayers’ ability to pay a delinquent tax debt. These expense standards set budget limits for taxpayers’ maximum payment amounts for certain collection agreements. The agreements include installment agreements based on financial ability to pay, deferred payment (currently not collectible status), and offers in compromise. This year, the structural categories of collection financial standards didn’t change. But the expense limitations increased in almost every area, except the standard allowance for out-of-pocket medical expenses.
Therefore, financially struggling taxpayers may get some more wiggle room in their budgets this year when negotiating collection arrangements with the IRS. People already in these agreements may look to renegotiate their terms to lower payments amounts.
For more information on this topic, contact a ShindelRock tax professional today.