The Internal Revenue Service Wednesday announced that it will offer relief to taxpayers struggling to pay their taxes.

It will be providing new penalty relief to the unemployed and also making installment agreements available to more people.

We have an obligation to work with taxpayers who are struggling to make ends meet, said IRS Commissioner Doug Shulman.

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, he added.

Two categories of taxpayers will be eligible for the penalty relief. First category consists of wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to the April 17 deadline for filing a federal tax return this year.

Second category consists of self-employed individuals who experienced a 25 percent or greater reduction in business income in 2011 due to the economy.

For applying to have the grace period on failure-to-pay penalties, taxpayers should file Form 1127A, available at

The IRS has stated that the maximum repayment term for streamlined installment agreements has been increased to 72 from 60 months.

More taxpayers will be in a position for utilizing streamlined installment agreements for drawing near on back taxes. Taxpayers who are obligated up to $50,000 in back taxes are entitled for a streamlined installment agreement.

Our goal is to help people meet their obligations and get back on their feet financially, Shulman said.