This past week the IRS offers a New Penalty Relief and Expanded Installment Agreements.  Under the new Fresh Start provisions, part of a broader effort started at the IRS in 2008, certain taxpayers who have been unemployed for 30 days or longer will be able to avoid failure-to-pay penalties. In addition, the IRS is doubling the dollar threshold for taxpayers eligible for Installment Agreements to help more people qualify for the program.

 The penalty relief will be available to two categories of  taxpayers: 
·     Wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to the 
      April 17 deadline for filing a federal tax return this year. 
  ·   Self-employed individuals who experienced a 25 percent or greater reduction in business income 
      in 2011 due to the economy.
 
This penalty relief is subject to income limits. A taxpayer’s income must not exceed $200,000 if he or she files as married filing jointly or not exceed $100,000 if he or she files as single or head of household. This penalty relief is also restricted to taxpayers whose calendar year 2011 balance due does not exceed $50,000.

The IRS strongly still encourages taxpayers to file their returns on time by April 17 or file for an extension to avoid the failure-to-file penalty.

If you have any questions or need help preparing your taxes, please do not hesitate to contact me at (310)
295-2215.