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Do you have an IRS tax problem and need immediate professional help? You’re not alone. Its estimated that one in every six taxpayers has a tax problem or unresolved tax debt at this time.

In its latest effort to help struggling taxpayers, the Internal Revenue Service today announced a series of new steps to help people get a fresh start with their tax liabilities.  The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens.

“We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” IRS Commissioner Doug Shulman said. “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.” The changes include:

The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, liens are automatically filed at certain dollar levels for people with past-due balances.

A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors. Usually the government is not the only creditor to whom the taxpayer owes money. A lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter. A lien can affect a taxpayer’s credit rating, so it is critical to arrange the payment of taxes as quickly as possible.

“Raising the lien threshold keeps pace with inflation and makes sense for the tax system,” Shulman said. “These changes mean tens of thousands of people won’t be burdened by liens, and this step will take place without significantly increasing the financial risk to the government.”

The IRS will also modify procedures that will make it easier for taxpayers to obtain lien withdrawals. Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. The IRS has determined that this approach is in the best interest of the government. In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw the liens.

The IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement (DDIA). For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow lien withdrawals under several scenarios:

Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored. In addition, this lowers user fees and saves the government money from mailing monthly payment notices. Taxpayers can use the Online Payment Agreement application on IRS.gov to set-up with Direct Debit Installment Agreements.

“We are trying to minimize burden on taxpayers while collecting the proper amount of tax,” Shulman said. “We believe taking away taxpayer burden makes sense when a taxpayer has taken the proactive step of entering a direct debit agreement.”

The IRS will also make streamlined Installment Agreements available to more small businesses. The payment program will raise the dollar limit to allow additional small businesses to participate.

Small businesses with $25,000 or less in unpaid tax can participate. Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.

The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business. Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less. Small businesses will need to enroll in a Direct Debit Installment Agreement to participate.

“Small businesses are an important part of the nation’s economy, and the IRS should help them when we can,” Shulman said. “By expanding payment options, we can help small businesses pay their tax bill while freeing up cash flow to keep funding their operations.”

The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers.

This streamlined OIC is being expanded to allow taxpayers with annual incomes up to $100,000 to participate. In addition, participants must have tax liability of less than $50,000, doubling the current limit of $25,000 or less. OICs are subject to acceptance based on legal requirements. An offer-in-compromise is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.

The demand for tax relief services has reached an all time high.  Business owners whose Companies are struggling have lost their houses and savings.  They can’t pay their employment taxes and they still owe money.  Taxpayers may owe taxes on debt that was forgiven.  Taxpayers may have lost their job or withdrawn money from their retirement accounts and owe early withdrawal penalties in addition to their regular taxes.

The IRS sends a series of notices, each getting more urgent.  When the taxpayer is unresponsive, its easier to push the lien or levy buttons that trying to work with someone to set up a payment plan or debt reduction.

“The layperson is at a significant disadvantage dealing with the IRS”, says Mitch Helfer, CPA, Managing Partner of CPAMiami™; a Florida Certified Public Accounting Firm.  Taxpayers are not familiar with debt relief programs and ultimately do not know their options or rights in dealing with the IRS.  Too often, this results in paying more than you may actually owe, not applying for penalty relief, not qualifying for payment plans and not exploring settling tax debt or incorrectly applying for settling tax debt for a reduced amount.

“We are a highly-trained, experienced, certified public accounting, who deals with IRS problems on a daily basis”, says Mitch Helfer, CPA.  Hiring a local, licensed CPA firm or licensed tax attorney offers taxpayers a distinct advantage over national, debt relief companies, where your case is assigned to a lower-level marketing specialist; unfamiliar with tax law, IRS policy and procedure, IRS negotiations and taxpayer rights.

In many cases you can reduce your tax debt significantly – whether this is the reduction of the penalties and interest that may have been assessed, a correction of errors or underreporting of deduction that may be available or a negotiated settlement amount of the overall tax debt.  The key is to have the “right” person on your side; handling your account.

The Internal Revenue Service continues to ramp up the number of tax liens and levies it files against taxpayers, despite a high number of Americans who are unable to pay their taxes.  The government agency filed liens against 1.1 million taxpayers last year, up from 168,000 in 1999.

In the past seven years, it has filed more than 5 million tax liens [Hazard, Carol. “Liens, Levies against Taxpayers Rise Sharply | Richmond Times-Dispatch.”Richmond, VA – News, Weather, Politics, Sports, Entertainment and Business Reports | Richmond Times-Dispatch. 20 Feb. 2011. Web. 02 Mar. 2011].

“The IRS is going after ANYONE who owes money, not just the wealthy”, according to National Taxpayer Advocate Nina E. Olson, who works for an independent arm of the IRS.  “By filing a lien against a taxpayer with no money and no assets, the IRS often collects nothing, yet it inflicts long-term harm on the taxpayer by making it harder for him to get back on his feet when he does get a job”.

IRS Recognizes the Need to Address a Struggling Economy

“Tax collection requires a delicate balancing of the government’s interest in collecting revenue and ensuring that all taxpayers pay their fair share of tax … and protecting financially struggling taxpayers from unnecessary harm,” Olson testified.

The IRS recognizes that many taxpayers are struggling financially and is taking positive steps to settling tax debt through collection delays, payment plans and tax settlements.

The IRS has recently indicated plans to implement new procedures of the availability of payment programs to those taxpayers who may not have previously qualified, the availability of tax settlement programs to those taxpayers who may not have previously qualified, a more expeditious withdrawal of tax liens – just to name a few.

• Taxpayers often believe they cannot afford tax relief services and try to resolve the problems themselves.