Tags: IRS | Unemployed | Taxpayers | Penalties

IRS Plan Will Let Some Unemployed Taxpayers Avoid Penalties

Wednesday, 07 March 2012 12:11 PM

Taxpayers who have been unemployed for at least 30 days in 2011 or 2012 will be able to avoid some penalties for failing to pay their taxes, the Internal Revenue Service said.

Those struggling taxpayers would have an extra six months to comply and avoid the failure-to-pay penalty. They would still owe interest on back taxes, the IRS said today.

“This new approach makes sense for taxpayers and for the nation’s tax system, and it’s part of a wider effort we have under way to help struggling taxpayers,” IRS Commissioner Douglas Shulman said in a statement.

The new rules apply to people who were unemployed for 30 consecutive days in 2011 or during the portion of 2012 before the April 17 tax filing deadline.

The rules also apply to self-employed taxpayers whose income declined 25 percent or more in 2011 because of the economy. Married couples with income exceeding $200,000 and individuals with income exceeding $100,000 don’t qualify, and neither do people who owe more than $50,000 in taxes for 2011.

The IRS also is making it easier to pay back taxes through installment agreements.

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Wednesday, 07 March 2012 12:11 PM
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