IRS Commissioner Douglas Shulman on IRS collections during recession
Posted on April 13, 2009
Filed Under IRS Collection Problems, IRS Financial Statements | 2 Comments
Today IRS Commissoner Douglas Shulman gave an interview on National Public Radio (NPR) about how the IRS will be dealing with hardship cases during these difficult economic times.
Shulman did not addresss what is really holding up IRS collections – an offer in compromise system that accepts only 25% of the offers it receives. The IRS collection guidelines have long been too rigid, resulting in an increasing number of taxpayers opting for bankruptcy on the IRS. This almost always results in a lower recovery to the IRS than an offer in compromise. And how is more bankruptcy good for our economy?
Here’s to Shulman truly being in sync with the hardships that taxpayers are going through and pushing through real changes - more administrative settlements that gives fresh starts and brings in dollars.
My clients are honest and usually have had some bad breaks – business failure, divorce, medical issues – it could happen to anyone. Opening up the compromise progaram will provide more fresh starts, bring in money to the Treasury and get those with IRS tax problems back to their full abilities, including homeownership.
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My experience is that the IRS is uniformly assessing penalties for late payment without regard to circumstances that affect the taxpayer’s liquidity.
I am increasingly getting calls from self-employed people who were making money in 2008, planning to pay the tax in 2009, and are now unable to pay because they are barely surviving. Many are unable to pay thier bills and mortgage, and have vigorous IRS collections, levy’s and leins in the midst of adjusting to poverty.
The IRS seems to have no plan or program for adjusting to the Great Recession.
Bankruptcy seems thier only option.