Although the unemployment rate is dropping, at more than 8 percent, millions of Americans are still struggling. So it’s no surprise that the IRS recently announced it would be expanding its 2008 “Fresh Start” program, providing unemployed Americans who can’t afford to pay their taxes a six-month grace period before they impose a failure-to-pay penalty. They will still be charged interest on the amount owed, but it’s capped at 3 percent, instead of the 25 percent maximum.
Even if you qualify for the “Fresh Start” program, you must file your taxes by the April 17 deadline, or you will be subject to a failure to pay penalty that can reach up to 25 percent per month.
A recent article in USA Today says, “The relief is available to wage earners who were unemployed for at least 30 consecutive days in 2011 or 2012 or self-employed taxpayers who experienced a reduction in business income of 25% or more in 2011.”
If you think you qualify, please file a Form 1127A.