Mar 5, 2008

Under the cloak of night (and filing season)- the IRS changes their collection standards!

For the second time in 5 months the IRS has changed the allowable living expense standards that it uses to determine how much you can pay on your tax debt. Due to increased costs in many areas, the IRS has changed these standards in the middle of filing season. The last change to these standards took the IRS over 2 years to implement.

The last change on October 1, 2007, came with waited anticpation and press. This change had no similar fanfare. The only press release on payments to your tax debt was for the ability to pay them on-line.

However, the allowable living expense standards have changed. Some highlights of these changes are:

1. Slight increase to Food, Clothing and miscellaneous expenses as well as housing and utilities
2. Car payment increase from $478 to $489 per allowed vehicle
3. Out of pocket medical expense standard for those under 65 increased from $54 to $57
4. Transportation expenses allowed increased for each area and 6 cities were deleted from having "special" increased allowances

For the most part, the expenses allowed are more than in the past. The IRS probably did not propose any fanfare as it will mean less payments and more collection alternatives available. If you believe you are getting the same treatment from the IRS, you may need a professional that is current with their rules and procedures.

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