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Big changes are coming if you owe a bundle in back taxes but can't afford to pay the entire bill. Through a program called Offer in Compromise, the Internal Revenue Service allows you to clear your debt by paying just part of what you owe. Last year the IRS accepted about 14,000 reduced payment offers, or about 20% of the proposals it received. When it made a deal, it settled for an average of about 16% of the taxpayer's liability.

But as of July 16 it will become tougher for some taxpayers to strike a bargain. To start, you'll have to send the IRS as much as 20% of your offer even to request a settlement. Today, you pay only a $150 fee. The good news is that the agency will have to respond to your offer within two years. Today, the IRS can take as long as it wants to get back to you.

To get a settlement, says Harris Abrams, an analyst with the tax research firm RIA, you'll usually need to prove you can't afford to pay the full bill. That can mean opening up all of your financial records to the agency, including bank and brokerage statements and mortgage documents. There is no magic formula. The agency decides each case on an individual basis. The burden is on you to convince the IRS that you cannot pay. You may also be able to negotiate a reduction in interest and penalties if you can prove that you were relying on IRS advice when you filed the disputed return.

If there are big bucks at stake, seek help from a tax pro. Be sure to use a legitimate professional and avoid so-called offer mills. These are outfits, often with slick Web sites, that guarantee they will get you a generous settlement, even if you can't document your argument that you can't afford to pay.

Most investors know about the benefit of diversifying across global stock markets. But as the world's largest markets have started to move more in sync, it's becoming important to diversify across industries, as well. Kate Phylaktis, a professor at London's Cass Business School, and Lichuan Xia, an equity analyst at Guotai Junan Securities in Hong Kong, looked at nearly 5,000 stocks in 34 countries over a decade through 2001. During this time, major markets acted more and more alike, but the performance of industries became more varied. Semiconductors, consumer services, and biotech stocks increasingly zigged when the overall market zagged.

The upshot? Broad-based international funds heavily invested in developed nations may not be providing much diversification benefit. Look at the portfolios of your international funds to see the industry concentrations, advises Phylaktis. Market indexes in Australia and Canada are heavily weighted toward basic materials, while the Standard & Poor's 500-stock index and the Swiss market contain large bets on the financial sector. Adding a small position in a global industry-focused fund can help improve diversification.

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