Agency offers helping hand

WASHINGTON --- As the nation sinks deeper into recession, the IRS is offering to waive late penalties, negotiate new payment plans and postpone asset seizures for delinquent taxpayers who are financially strapped but make a good-faith effort to settle their tax debts.

IRS Commissioner Doug Shulman said Tuesday that tax agents are being given new authority to work with victims of the nation's economic woes who are struggling to pay their bills.

"We need to recognize that it's an extraordinary, challenging time," Mr. Shulman said in an interview. "We need to understand the taxpayers' perspective. We need to walk a mile in their shoes."

It's unrealistic to expect some taxpayers to make timely payments in this economy, Mr. Shulman said. However, he cautioned that those seeking help will have to demonstrate their inability to pay. Those who don't file tax returns, or who simply ignore collection notices, won't be eligible, he said.

"The most important thing for people to do is to get on the phone or walk into an IRS office," he said. "The worst thing someone can do is go dark and not be in a discussion with us."

Just last month, the agency announced a program making it easier for homeowners with an IRS lien on their property to refinance their mortgages or sell their homes.

With the filing season for 2008 tax returns opening this week, the IRS expects to process 250 million returns over the next few months, including 130 million from individuals.

The new leniency program is geared toward people who have paid their taxes in the past but are now facing a financial hardship.

"This is not a free ride for people who can actually pay their taxes," Mr. Shulman said.