IRS Fresh Start Program - How it Works

The IRS Fresh Start Program was created in 2011 to help taxpayers struggling to pay their tax debt. The program provides flexible offer in compromise terms that allows even the most struggling taxpayers to relieve their tax issues.

In this post, we will explain how the IRS Fresh Start Program works and what options are available to taxpayers. We will also discuss the eligibility requirements for the program. So if you are struggling with tax debt, read on to see if the Fresh Start Program can help you get back on track.

The goal of the program

The fresh start initiative program was designed by the IRS to help taxpayers who owe money to the IRS. The program has several different components, all of which are designed to make it easier for more taxpayers to get back on track. One of the most important components of the fresh start program is the provision of more time to pay taxes.

Under the program, taxpayers who owe less than $50,000 in taxes will have up to 72 months to pay off their debt. The fresh start program also includes other provisions, such as making it easier to set up a payment plan and reducing penalties for taxpayers who are unable to pay their taxes on time. Overall, the goal of the fresh start program is to make it easier for taxpayers who are struggling to pay their taxes and get back on track.

Who Qualifies for the Program?

Both individual taxpayers and business owners can qualify for the program if they meet certain requirements.

In order to qualify for the IRS fresh start Program, you must be in tax compliance. In other words, you have to meet a number of requisites to qualify. In short, you must have filed at least the past six years of tax returns and made any required payments (if applicable).

You must owe $50,000 or less or have the ability to repay most of the tax debt. In addition, this debt must be able to be repaid over the span of 5 years or less. There are other requirements to qualify for the fresh start initiative that taxpayers should research.

What options are available?

There is more way than one to repay your tax debt which can help avoid future tax penalties. When you owe back taxes you must find the best ways to lower your tax bill. You can consider various ways to repay owing debt or to not pay for it by taking the following steps:

IRS Installment Agreement

This is the most common way for individuals to repay their tax debt. Installment agreements allow taxpayers to pay their outstanding tax debt in the form of monthly payments for a definite period of time.

Penalty Abatement

While there may be valid reasons why you have failed to file your taxes on time, the IRS will take no excuse and enforce penalties on you. Even if you filed and paid on time, there might be penalties set on you if you had errors on your return.

If it’s your first time falling short of the deadline, you can request penalty abatement. You may even qualify for a first-time penalty reduction if certain conditions are met:

• For the past three tax years prior to receiving the penalty, you have no fines or you have not been asked to file a tax return;
• All of your required tax returns have been filed or you have requested an extension, and
• You paid your taxes in full or made arrangements to pay your tax obligation (payment plan)

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Tax Lien Withdrawal

A federal tax lien is a claim or legal right against assets that are usually used as collateral to satisfy a debt. In other words, it allows the government to legally claim your property to pay off tax debt that has not been paid either because of neglect or refusal. The only way to get rid of federal tax liens is to settle the debt in full.

A tax lien withdrawal assures the IRS that they are not competing with other creditors for your property, but that does not mean you still aren’t liable for your tax debt.

IRS Offer in Compromise

The offer in compromise allows you to settle your tax debt with IRS for much less than originally owed. It is rare that taxpayers opt for an offer in compromise because it requires you to make a reasonable offer based on your financial situation and to hire a tax expert to consult with before taking this route.

Some people may not qualify for this program, so it is best to consult with tax professionals to weigh your options.

The IRS Fresh Start program can be a great way to get your finances back on track if you find yourself in over your head with tax debt. This program offers many different options for those who qualify, so it’s important to understand what is available to you. Whatever option you decide on, it is crucial to gather as much supporting evidence as possible to make your case for tax relief.

If you think the Fresh Start tax program might be right for you, get in touch with the tax professionals at Elite Tax Resolutions for a free consultation. We have years of experience helping people just like you get tax relief through various methods.