If you're like me, "IRS" is one of the scariest abbreviations in the English language. I pay my taxes, file my returns on time and don't cheat. Did I just jinx myself?
So, I was pleasantly surprised when I got word the other day that the Internal Revenue Service is showing its softer side in these tough economic times.
If you already have a payment agreement and your situation has gotten worse, the agency may be able to help you avoid default. Options include adjusting payments, making allowances for missed payments or, in some cases, deferring collections.
The agency also is touting new tax laws that could net you a bigger refund, such as a first-time home buyer credit of up to $7,500.
What's going on here? The IRS is helping people get more money back and giving breaks on payments? I figured there had to be a catch.
So I called Sue Hales, an Illinois spokeswoman for the IRS who laughed when I told her my doubts about the agency's offer of help. She said the agency knows many taxpayers don't view the IRS as approachable. She said that's one reason the agency is reaching out, especially to people who owe taxes.
That doesn't mean that the IRS will let anyone take a pass on filing returns. Hales said one of the worst things you can do is avoid filing. The late-filing penalty can make a bad situation worse, especially for someone overwhelmed by bills.
That's why Hales urges taxpayers to talk to the IRS if they're having trouble with back taxes. In many cases, she said, the agency can work with you.
"We have always encouraged people to contact us," she said. "Don't wait for us to contact you."
Isn't the IRS's job to rake in as much revenue as possible?
"Our job is to collect the correct amount of revenue, so what we've always encouraged people to do is to take advantage of every credit and every deduction that they have available to them," Hales said. "There are times when people are audited when it doesn't result in an additional tax. It results in a refund because the taxpayer has not claimed everything that was actually due them."
For example, roughly one in five eligible taxpayers - those who earn less than $42,000 and meet other requirements - don't claim the Earned Income Tax Credit. As a result, this year they could be losing out on as much as $4,824.
Its Web site, www.irs.gov, is full of tips on tax credits, changes to tax laws and free options for preparing your tax return.
The site also is a great place to educate yourself on your options should you find yourself with a tax liability you can't afford.
Or you can pop into one of four local IRS offices for assistance. Hales said you'll find agency employees helpful and friendly.
If you have general tax questions, call 800-829-1040. If you have a specific tax issue and have received a notice from the IRS, it's best to call the number on the form.
The IRS has improved its Free File program so virtually all taxpayers can file electronically for free, speeding up refunds. Who doesn't have immediate use for some extra cash?