The IRS has expanded its "Fresh Start" initiative by offering more flexible terms to its Offer-in-Compromise Program. These newest rules enable some financially distressed taxpayers to clear up their tax problems even quicker.

An offer-in-compromise (OIC) is an agreement between a taxpayer and the IRS that settles the taxpayer's tax liabilities for less than the full amount owed. An OIC is generally not accepted if the IRS believes 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 determine the reasonable collection potential.

This expansion of the "Fresh Start" initiative focuses on the financial analysis used to determine which taxpayers qualify for an OIC.

Here are the OIC changes:

  • Revising the calculation for a taxpayer's future income The IRS will now look at only one year (instead of four years) of future income for offers paid in five or fewer months; and two years (instead of five years) of future income for offers paid in six to 24 months. All OICs must be paid in full within 24 months of the date the offer is accepted.
  • Allowing taxpayers to repay their student loans Minimum payments on student loans guaranteed by the federal government will be allowed for the taxpayer's post-high school education. Proof of payment must be provided.
  • Allowing taxpayers to pay state and local delinquent taxes When a taxpayer owes delinquent federal and state or local taxes, and does not have the ability to fully pay the liabilities, monthly payments to state taxing authorities may be allowed in certain circumstances.
  • Expanding the Allowable Living Expense allowance Standard allowances incorporate average expenses for basic necessities for citizens in similar geographic areas. These standards are used when evaluating installment agreement and offer-in-compromise requests. The National Standard miscellaneous allowance has been expanded. Taxpayers can use the allowance to cover expenses such as credit card payments and bank fees and charges.

More information on the "Fresh Start" initiative can be found at IRS.gov.

Form 656-B, Offer in Compromise Booklet, and Form 656, Offer in Compromise, can be found at IRS.gov or ordered by calling 1-800-TAX-FORM (800-829-3676).

Links:

  • Form 656, Offer in Compromise (PDF)
  • Form 656-B, Offer in Compromise Booket (PDF)

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March 2015
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Upcoming Tax Dates

March 2All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2014.

March 2Farmers & fishermen
File your 2014 income tax return (Form 1040) and pay any tax due - Details

March 2Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2014. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2014. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

March 2 Wagering tax
File Form 730 and pay the tax on wagers accepted during January.

March 2 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in January.

March 10 Employees who work for tips
If you received $20 or more in tips during February, report them to your employer - Details

March 11 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of February.

March 13 Regular method taxes
Deposit the tax for the last 13 days of February.

March 16 Corporations
File a 2014 calendar year income tax return (Form 1120) and pay any tax due - Details

March 16 S Corporations
File a 2014 calendar year income tax return (Form 1120S) and pay any tax due - Details

March 16 S Corporation election
File Form 2553, Election by a Small Business Corporation, to elect to be treated as an S corporation beginning with calendar year 2015. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2016.

March 16 Electing larger partnerships
Provide each partner with a copy of Schedule K1 (Form 1065B), Partner's Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K1. This due date applies even if the partnership requests an extension of time to file the Form 1065B by filing Form 7004

March 16 Social security, Medicare, and withheld income tax
If the monthly deposit rule Page 6 Publication 509 (2015) applies, deposit the tax for payments in February.

March 16 Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in February.

March 25 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 14 days of February.

March 27 Regular method taxes
Deposit the tax for the first 15 days of March.

March 31 Electronic filing of Forms W2
File copies of all the Forms W2 you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms W2G
File copies of all the Forms W2G you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms 8027
File Forms 8027 for 2014. This due date applies only if you electronically file.

March 31 Wagering tax
File Form 730 and pay the tax on wagers accepted during February.

March 31 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in February.

March 31 Electronic filing of Forms 1097, 1098, 1099, 3921, 3922, and W2G.
File Forms 1097, 1098, 1099, 3921, 3922, and W2G with the IRS. This due date applies only if you file electronically. Otherwise, see March 2. The due date for giving the recipient these forms generally remains February 2. View More Tax Dates