The Internal Revenue Service (IRS) has implemented numerous programs to assist taxpayers in solving their tax issues, with one of the most prominent among them being the Fresh Start initiative. This program aims to give taxpayers a “Fresh Start” with their taxes by providing various options to ease tax debt payment. It is designed to assist the taxpayers, particularly those facing financial hardship, by facilitating tax debt resolution, making installments, and offering penalty relief. However, this initiative demands prospective taxpayers to meet certain eligibility requirements. This article will provide a detailed examination of the IRS Fresh Start initiative’s eligibility criteria for 2024.

Fresh Start Qualification Metrics

To qualify for the Fresh Start program, certain conditions must be met, such as the amount of tax owed and the regularity of tax filings. The eligibility criteria also vary depending on the type of relief sought through the initiative. Let’s explore three primary types of relief and their corresponding qualification metrics.

Tax Lien Withdrawals

For the IRS to consider a taxpayer for tax lien withdrawal (removing the claim on a taxpayer’s property for unpaid taxes), the following conditions must be fulfilled:

  • Amount of owed back taxes does not exceed $25,000.
  • Enrolment in the Direct Debit installment agreement with set payments deducted from your bank account every month.
  • Taxpayers must have made three consecutive payments under the Direct Debit installment before applying for this relief.

Tax Payment Installment Agreement

For taxpayers who owe $50,000 or less in back taxes, the IRS offers an installment agreement under the Fresh Start program. Eligibility conditions include:

  1. You must have filed all your required tax returns.
  2. Enrollment in a Direct Debit installment agreement is recommended to increase the chances of approval.

Offer in Compromise

Offer in Compromise (OIC) is a program that allows taxpayers to settle their tax debt for less than the full amount they owe. The eligibility criteria for this relief includes:

  • All tax returns for the past five years must be filed.
  • You must not be in an open bankruptcy proceeding.
  • All estimated tax payments for the current year must be made.
  • Business owners must make all quarterly and employment tax deposits for the current quarter.

Frequently Asked Questions

What if I owe more than $50,000?

If you owe more than $50,000, you may be eligible for a traditional installment agreement. However, you may need to provide a full financial disclosure.

Can I avail of the Fresh Start initiative if I haven’t filed all my tax returns?

Filing all required tax returns is a prerequisite for most Fresh Start initiative programs. If you have unfiled tax returns, you should consider filing them immediately to take advantage of the Fresh Start initiative.

Every taxpayer’s situation varies, and while this article aims to provide insightful information, it’s recommended to consult with a tax professional or visit the official IRS website for personalized advice. Keep in mind that becoming knowledgeable about your obligations and entitlements can go a long way toward resolving your tax issues in 2024.