IRS

The IRS announced Wednesday that it's providing additional relief for unemployed Americans who can't afford to pay their taxes.

The IRS said the provisions expand its 2008 "Fresh Start" program, which was designed to help financially-distressed Americans who were behind on their taxes. Under the provisions announced Wednesday:

• Unemployed taxpayers who are unable to pay their taxes by the April 17 deadline will be eligible for a six-month grace period before the IRS imposes a failure-to pay-penalty.

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In general, taxpayers who fail to pay by the deadline are subject to a failure-to-pay penalty of one-half of 1% per month, up to a maximum of 25% of the amount owed.

Taxpayers will still be charged interest on the amount owed, the IRS said. The current interest rate on unpaid taxes is 3% on an annual basis.

Taxpayers who can't pay their taxes should still file a tax return by April 17, the IRS said. Otherwise, they'll be subject to a failure-to-file penalty of 5% a month, up to 25%.

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.

To apply for the grace period on failure-to-pay penalties, taxpayers should file Form 1127A, available at irs.gov.

• Taxpayers who owe up to $50,000 in back taxes are eligible for a streamlined installment agreement. Previously, the cut-off for the streamlined agreement was $25,000.

In addition, the maximum repayment term for streamlined installment agreements has been increased to 72 from 60 months, the IRS said.

Taxpayers who enter into an installment plan are eligible for reduced penalties, although interest continues to accrue on the unpaid balance.

The streamlined agreement is significantly easier for taxpayers to fill out than the longer version, the IRS said.

"We have an obligation to work with taxpayers who are struggling to make ends meet," IRS Commissioner Doug Shulman said. "This new approach makes sense for taxpayers and for the nation's tax system, and it's part of a wider effort we have underway to help struggling taxpayers."