No matter at what point you are in your life, you probably have to think about paying taxes. For some, this is not much more than a minor inconvenience that takes some time to file and submit. However, for some, paying taxes is a significant burden – and many might feel like they cannot pay the tax they own. Something like this can have long-lasting consequences on the morale and credit score of the whole family.
That is why the IRS has programs in place that allow individuals that cannot pay the taxes they own to start again – literally a fresh start! Naturally, not everyone can qualify for this program, and since it can affect your credit score, you should consider whether this is the best option for your needs. Here is what you need to know about the IRS Fresh Start Program and how to apply with Clean Slate Tax.
The IRS Fresh Start Program: An Overview
The IRS Fresh Start Program is a wide range of initiatives that allow individuals who cannot pay the taxes they own to reduce their debt and start fresh. This program, which has been launched by the IRS and has been running for over ten years, has allowed many taxpayers to get out from uncomfortable situations, tax debts, and penalties.
The measures included in the IRS Fresh Start Program include several initiatives, such as freezing the debts, reducing the amount owed, or allowing the taxpayer in debt to repay the amount owed in smaller chunks.
Once you have found out whether you qualify, you and your tax advisor will decide on the initiatives that can help you in your situation. While you might not be able to get rid of your whole debt, the program prevents you from receiving penalties and encourages you to repay the debt in smaller, more manageable chunks.
Some of the initiatives applicable include:
- Installment Agreement (IA)
- Offer in Compromise (OIC)
- IRS Fresh Start Program
- Currently, Non-Collectible (CNC)
Your financial advisor or tax professional will take into consideration your financial situation and events such as bankruptcy to decide what the best course of action will be.
Do You Qualify For The IRS Fresh Start Program?
Undoubtedly, the IRS Fresh Start Program can be extremely beneficial for those who find themselves unable to repay the taxes owed. Yet, not everyone is eligible for this program – which is specifically designed to help those who otherwise have a healthy financial situation. Some of the conditions that you need to meet to qualify for the help program include:
- Your tax debt is lower than $25,000
- You are happy to follow an installment plan that allows you to repay the owed balance in 60 months
- After three installments, you can apply for a tax lien withdrawal
- You have always continued to pay your direct debit installment plans
The IRS Fresh Start Program is created to be available to everyone and, with so many help options under the program’s umbrella, you will always find an option to help you. However, this program can be complicated enough that it might be necessary for you to partner with a tax professional or advisor to understand the implications of your choice.