In a recent information release (IR 2012-31), Uncle Sam offers to take it easy on folks who are struggling in this economy.
IRS is now offering late payment penalty relief, and the opportunity to allow more taxpayers to qualify for installment payment agreements.
Certain wage earners and self-employed individuals will now qualify for a six-month grace period on failure to pay penalties. A request for an extension of time to pay will result in relief from penalties for tax year 2011 as long as the tax, interest and any other penalties are fully paid by October 15, 2012. (More on Filing and Paying Taxes Late.)
To qualify, wage earners must have been unemployed for at least 30 consecutive days during 2011 or 2012 up to the initial filing deadline of April 17, 2012. Self-employed individuals who have experienced a 25% or greater reduction in business income in 2011 will also qualify.
Qualifying taxpayers’ income must not exceed $100,000 in the case of single or head of household filers and $200,000 for joint filers. Also, penalty relief won’t be available to taxpayers whose calendar year 2011 tax balance due exceeds $50,000.
Check out Form 1127-A, which must be filed in order to seek relief in these circumstances.
More from Nolo: Back Taxes & Tax Debt.