We have wondered why IRS has not released the 2007 figures for transportation, housing & food and clothing. We heard a while back and now it can be confirmed with 100% certainty. The National Standards for Allowable Living Expenses are getting a complete overhaul. Some changes we know are being made are:

1) No additional amounts for Alaska and Hawaii. The standards for food, clothing, etc., will be the same for all 50 states;

2) Housing and Utilities. The Family group which currently starts at 2 people will now begin at 1 person;

3) There will be a single public transportation allowance for the entire country rather than a separate amount for each geographic region;

4) A new expense will be added for health care. This expense will be automatic and will not have to be proven. However, if the taxpayer spends over the allotment, the expense must then be proven. Of course, specific details are unknown;

5) The IRS has long believed that the amounts allocated for food, clothing and housing were far too generous. We will see a dramatic overhaul in these amounts.

It is our opinion that these changes have been brought about because IRS Collection personnel felt the current amounts resulted in too many uncollectible accounts; installment agreements for too few dollars and horrors...acceptable Offers in Compromise. We believe that the changes will almost certainly result in dramatically higher installment agreement payments, far fewer Currently Not Collectible Accounts and a near certain death-knell for the already moribund Offer in Compromise program.

The bottom line is that if you owe Federal taxes, it will cost you far more money to settle your debts.

Stay tuned for details in the next few weeks.

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Last updated 12/11/2007 03:59:00 PM

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August 27 2007 BREAKING NEWS

Get Ready for Major IRS Changes Offers, Installment Agreements, Currently Not Collectible Cases to Become Much, Much Tougher

Get Ready for Major IRS Changes
Offers, Installment Agreements, Currently Not Collectible Cases
to Become Much, Much Tougher