The Great Recession has devastated many Americans, leaving them unable to pay their mortgages, credit card bills and, increasingly, their tax liabilities. In the past, the Internal Revenue Service has aggressively sought to collect past due taxes, interest and penalties, imposing liens and levies to squeeze funds from struggling taxpayers who genuinely lack the resources to meet their obligations.
Fortunately, the IRS has increasingly recognized the need to work with delinquent taxpayers seeking to resolve their tax problems without unduly adding to their financial burdens. Beginning in February 2011, the IRS implemented a “Fresh Start” initiative to provide individuals and small businesses with a number of options to mitigate their outstanding obligations. This initiative, which was expanded in the spring of 2012, apparently reflects a new, pragmatic approach by the IRS, recognizing the importance of working with taxpayers who are dealing with their tax liabilities in good faith and helping them dig out of their financial holes.
