We were shocked to find out today that Congress may be very close to making the Offer in Compromise program far more difficult for the average taxpayer. The National Association of Enrolled Agents just informed us that the Senate, by a vote of 89-11, passed on Wednesday HR 3, the Safe, Accountable, Flexible, Efficient Transportation Equity Act of 2005 (SAFETEA), which authorizes appropriations for FY04-FY09 for highway programs out of the Highway Trust Fund. The Senate's $295 billion bill includes a raft of tax provisions, including:

Offers-in-compromise: In a provision that would raise some $668 million over ten years, taxpayers would be required to make a 20% down payment with any lump- sum offer or to adhere to his/her proposed periodic payment offer while IRS considers the OIC. This provision repeals the $150 application fee.

Frivolous submissions: The penalty for frivolous tax submissions would increase from $50 to $5,000. The penalty would be expanded to apply to all taxpayers for all types of federal taxes, including CDP, IA, OIC, and Taxpayer Assistance Orders.***This is a provision with which we strongly agree***

PARTS OF THIS WERE TAKEN FROM THE E@LERT OF MAY 20, 2005.

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Last updated 09/19/2008 02:57:12 PM

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