IRS “Fresh Start” Program

On February 24, 2011, the IRS announced they would be rolling out a series of changes to current collection procedures that would prove to the world that they are just a bunch of softies.  Ok, they didn’t go that far.  But they did say that they would be filing fewer liens, simplifying the procedure for removal of a lien, and streamlining the Offer in Compromise program for certain taxpayers.

Here we are in June and there are still more questions than answers.  For example, the IRS claims that the new dollar threshold for filing a federal tax lien is now $10,000 instead of $5,000, but liens may be filed on balances less than $10,000 when circumstances warrant.  What circumstances might warrant a deviation from this new rule?  We don’t know.  The IRS also claims that they will be expanding the Streamlined Offer in Compromise process.  What are the details of this procedure?  And does it really benefit the taxpayer?  From what I have seen, “streamlining” a procedure can be a double-edged sword.  On one hand, the process is shortened so the taxpayer finds tax relief sooner if the offer is accepted.  On the other hand, if streamlining skips important steps or moves the process along so quickly that it prejudices the taxpayer, then only the government benefits.

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