If you are struggling with IRS tax issues, you are not alone. Millions of Americans face this challenge every year. The Internal Revenue Service (IRS) can be intimidating, and the consequences of failing to pay taxes or responding to IRS communications can be serious. Fortunately, there is a program called Clean Slate Tax that can help individuals and businesses resolve their tax issues. In this article, we’ll explain what Clean Slate Tax is, how it works, and how it can help you.
What is Clean Slate Tax?
Clean Slate Tax is a program created by the IRS that allows individuals and businesses to resolve their tax issues through a series of steps. The program is designed for taxpayers who owe $50,000 or less in combined individual income tax, penalties, and interest, or for businesses that owe $25,000 or less in payroll taxes and have filed all required returns. The program’s goal is to help these taxpayers get a fresh start by resolving their tax issues and paying their debts.
How Does Clean Slate Tax Work?
Clean Slate Tax works in three steps:
Step One: File all required tax returns
Before you can participate in Clean Slate Tax, you must file all required tax returns. This includes all income tax returns for the current and previous years and all payroll tax returns if you are a business. If you are missing any forms or documents, Clean Slate Tax can help you obtain them.
Step Two: Apply for Clean Slate Tax
You can apply for Clean Slate Tax using the IRS’s online application or by filing Form 656. As part of your application, you will need to provide documentation of your financial situation, including income, expenses, and assets. The IRS will review your application and determine if you are eligible for the program.
Step Three: Make Payments and Stay Current on Your Taxes
If you are approved for Clean Slate Tax, you will need to make payments on your outstanding tax debt. You may be able to negotiate a payment plan that works for you, based on your income and expenses. Once you have made all required payments, you will be considered current on your taxes and your tax lien will be released.
How Can Clean Slate Tax Help?
Clean Slate Tax can help you in several ways:
- Stop collections: Once you are approved for Clean Slate Tax, the IRS will stop all collection activity against you, including wage garnishments and bank levies.
- Resolving tax debt: Clean Slate Tax can help you resolve your outstanding tax debt and get a fresh start.
- Clearing tax liens: Once you have made all required payments, Clean Slate Tax will release any tax liens that have been filed against you.
- Customized payment options: Depending on your financial situation, you may be able to negotiate a payment plan that works for you. This can help you avoid defaulting on your payments and facing additional penalties.
What is the deadline for applying for Clean Slate Tax?
There is no deadline for applying for Clean Slate Tax. However, the sooner you apply, the sooner you can resolve your tax issues and start fresh.
What if I owe more than $50,000 or $25,000?
If you owe more than $50,000 or $25,000, you may still be able to resolve your tax issues through other programs or negotiation with the IRS. Clean Slate Tax is designed for individuals and businesses that owe smaller amounts.
What if I am already in a payment plan with the IRS?
If you are already in a payment plan with the IRS but are struggling to keep up with your payments, Clean Slate Tax may be able to help you negotiate a new payment plan that works for your current financial situation.
What if I can’t make any payments?
If you are unable to make any payments, Clean Slate Tax may still be able to help you by providing other options, such as an installment agreement or an offer in compromise.
IRS tax issues can be stressful and overwhelming, but programs like Clean Slate Tax can help individuals and businesses resolve their tax issues and get a fresh start. If you are struggling with tax debt, consider applying for Clean Slate Tax to see if it can help you.