This year the tax man cometh -- to help

Tue Jan 6, 2009 8:23pm EST
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By Jasmin Melvin

WASHINGTON (Reuters) - Throwing off its bully image for the 2009 U.S. tax season, the Internal Revenue Service is vowing to be sensitive and do what it can to help financially strapped Americans.

"We're announcing a number of concrete steps that the IRS is taking to work with taxpayers if they find themselves in difficult economic situations because of the current economy," Doug Shulman, a commissioner for the federal tax office, said in a conference call with reporters.

As Americans "go through their annual ritual of citizenship," as Shulman put it, IRS agents have been instructed to be sensitive, especially to previously compliant taxpayers who are for the first time unable to pay.

"We recognize the economic realities that are out there," Shulman said. "We're available to work with people."

The agents can suspend collection actions, reduce monthly payments, allow a skipped payment and take other actions to help those in need avoid default. And those who believe they cannot pay their 2008 taxes or worry they will miss a payment on back taxes can contact the agency to avoid penalties.

At the same time, the agency is trying to get more cash back to taxpayers by promoting deductions and credits.

The Recovery Rebate Credit will allow some to collect on any portion of the maximum amount of last year's Economic Stimulus Payment that they did not receive. Based on the 2008 return, citizens who have had a child, experienced a drop in income or are no longer claimed as a dependent are among those eligible for the credit.

The IRS also expanded its free electronic filing program to include those with income exceeding $56,000.

"The vast majority of Americans, we're hoping, are able to actually pay their taxes on time in the full amount," Shulman said. "I don't anticipate that these specific measures will show any appreciable drop in revenue to the government."

(Editing by Leslie Adler)

<p>Holding a tax rebate letter from the Internal Revenue Service, President George W. Bush speaks about the economy during a visit to a small business in Sterling, Virginia March 26, 2006. REUTERS/Kevin Lamarque</p>