QUESTION:

            I tried setting up an installment agreement with the IRS myself, but I was not able to negotiate an amount that I felt I could make comfortably each month.  The revenue officer kept telling me that there were national standards that she must apply and most of my living expenses were greater than the national standards.  What are these national standards?

ANSWER:

            The IRS has instituted national standards based on data from the Bureau of Labor Statistics, the Medical Expense Panel Survey and other governmental surveys for allowable living expenses, housing and utilities, and transportation.  Many of my clients have similar problems when dealing with the IRS because the national standards do not take into consideration costs of living such as gasoline that costs three dollars per gallon.  While it is annoying, the standards are here to stay.  However, beginning in just a few months, the IRS will adopt new standards.  The new standards have been updated to include a new category for out of pocket health care expenses, eliminated the income ranges for food, clothing and other items, an expanded number of categories for household categories, an allowance for cell phone costs in housing and utilities, equal allowances for first and second vehicles.  These expenses are occasionally adjusted for inflation.  While there are some major changes to the national standards, it will most likely not solve the problem that most taxpayers face when dealing with the IRS.  It will be interesting to see how the changes affect offers in compromise that are currently being considered by the IRS when the new year rolls around.  If you have some IRS tax liability and need help negotiating a monthly payment or offer in compromise you can afford, please call my office today for your free consultation.  We also provide family court, probate and real estate services.  Call today for your free consultation.

    I will follow up on this topic after the first of the year when we can see how the new national standards are affecting our clients and what types of things we are doing to work with the national standards. 

Powered by Qumana