If you’re wrestling with substantial tax debt, this guide will arm you with the tools you need to embark on a path to financial freedom. The IRS Fresh Start program provides taxpayers, just like you, with relief from overwhelming tax obligations. Understand the program, and leverage it to your advantage to wipe off that tax debt slate clean.
What is the IRS Fresh Start Program?
The IRS Fresh Start program is a collection of changes made to the tax policies to help taxpayers comfortably pay off their debts. Introduced in 2011, the program offers several benefits, including extended time for payment, eased penalties, and more options for settlements.
Understanding Fresh Start’s Installment Agreements
An installment agreement lets you pay your tax debt in smaller monthly installments. Under the Fresh Start program, the IRS extended the maximum repayment period from 60 months to 72 months for taxpayers owing $50,000 or less.
Offer in Compromise
This is an agreement between a taxpayer and the IRS to settle the taxpayer’s tax liabilities for less than the full amount owed. It’s not a guarantee, though. The IRS will consider your ability to pay, income, expenses, and asset equity before offering compromise.
Lien Thresholds and Withdrawals
The Fresh Start initiatives bumped the lien thresholds from $5,000 to $10,000. Also, taxpayers can now request a withdrawal of their filed Notice of Federal Tax Lien if they enter a Direct Debit Installment Agreement.
FAQs about the IRS Fresh Start Program
Can everyone apply for the IRS Fresh Start Program?
The Fresh Start Program is available to any taxpayer owing the IRS $50,000 or less in combined tax, penalties, and interest.
How does one apply for an Offer in Compromise?
To apply for an Offer in Compromise, fill out Form 656-B and mail it to the IRS. If eligible, the IRS will get in touch with you.
Can tax penalties be removed under the IRS Fresh Start Program?
The Fresh Start program may help struggling taxpayers get relief from certain penalties via the Penalties Relief option depending on the taxpayer’s situations and reasons.
Conclusion
It’s time to wipe your tax slate clean with the IRS Fresh Start Program. While overcoming tax debt may seem overwhelming, this program offers you tangible solutions. Equip yourself with this knowledge, consult with your tax advisor, and seize the opportunity to settle your balances in a manageable way. Always remember, you’re not alone in your tax struggles, and there’s help available to guide you to financial stability.
