IRS Fresh Start Program Qualifications
What are some IRS Fresh Start Program features?
If you owe the IRS and unable to pay in full, you may question how you can get your delinquent tax debt paid, and possibly avoid unnecessary additional penalties and interest.
The IRS Fresh Start program may help delinquent taxpayers avoid tax liens, pay back taxes and so much more. If eligible, individual taxpayers and small business owners may benefit from the IRS Fresh Start program. Here are four important features of the IRS Fresh Start program:
Tax Liens. The IRS Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file an IRS Tax Lien. That amount is now $10,000. However, in some cases, the IRS may still file a lien notice on amounts less than $10,000. Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a direct debit payment plan.
Stop IRS Levy. Once approved and as long as you adhere to your agreement, you will not be subject to an IRS Levy while in the IRS Fresh Start program
Installment Agreements. Since the IRS Fresh Start program has been expanded, it allows access to individual taxpayers who owe up to $50,000 to pay through monthly direct debit payments for up to 72 months (six years).
Offers in Compromise. The IRS Fresh Start program expanded and streamlined the Offer in Compromise program. The IRS now has more flexibility when analyzing a taxpayer’s ability to satisfy their tax debt. As a result, this makes the Offer in Compromise settlement program accessible to more delinquent taxpayers.
What is the IRS Fresh Start Program?
The IRS Fresh Start Program was designed to help ease the burden on delinquent taxpayers unable to pay their entire tax debt in one lump-sum. Due to the financial hardships many consumers are facing today, the IRS Fresh Start program combines penalty relief with monthly installments up to a maximum of 72 months for eligible taxpayers. Four of the most prominent qualifications to determine eligibility and monthly payment amount include, but are are not limited to the following:
Amount of tax debt owed
Monthly income
Monthly allowable expenses
Liquid Assets (Equity in home, Retirement Accounts, Cash on hand, etc.,)
The IRS Fresh Start program has helped streamline the process of paying back what is owed to the IRS. Many delinquent taxpayers have obtained peace of mind knowing they may now avoid the following problems associated with IRS tax debt:
Additional Interest
Added Penalties
IRS Tax lien
The IRS started its Fresh Start Program in 2008 and expanded it in 2012 to alleviate the economic problems of taxpayers who owe as much as $50,000 in taxes. The Fresh Start program is available to both small business owners and individual taxpayers.
Furthermore, the premise of the IRS Fresh Start Program took into account the various financial challenges associated with even unemployed delinquent taxpayers. Delinquent taxpayers who are out of work for longer than 30 days may be eligible to have their IRS charges waived, and request a six-month extension to file and pay their tax debt.
Payment Options under the IRS Fresh Start Program.
The IRS Fresh Start Program uses 3 repayment options to taxpayers. All 3 choices enable consumers to pay off their tax debts lawfully and adequately. They may also enable individuals to avoid further penalties and interest that could cause excessive financial hardships.
The first option readily available to individuals is called an extended installment plan. An extended installation plan was created for consumers who owe $50,000 or less to the IRS. It grants taxpayers approximately 72 months to pay off what they owe without sustaining additional charges and interest. It likewise stops IRS collection activities like wage garnishments, tax liens, and IRS seizures.
This option is one of the most commonly used under the IRS Fresh Start program. The payments that taxpayers make every month will be based on how much money they currently make together with the worth of the properties they have at their disposal. The monthly payments should be reasonable, so that taxpayers can make them on time, and without causing an additional financial burden each month.
The second choice is called an Offer in Compromise. If approved, an Offer in Compromise enables taxpayers to settle their tax debt in an amount significantly lower than what is owed to the IRS.
With an Offer in Compromise, all of a taxpayer’s tax debt included in the settlement is forgiven. However, the taxpayer must adhere to strict guidelines for five years once the offer is accepted.
If you want to cut a deal with the IRS to pay off your tax debt, it is imperative that you submit your best offer. Your offer must convey a true reflection of your current financial profile. Due to the complexities of conveyance, you should seriously consider speaking with an experienced Tax Adviser, and get yourself pre qualified first.
You’re most favorable outcome can be achieved by having a Federally Authorized Tax Professional prepare and submit your Offer in Compromise to the IRS on your behalf. Having an experienced tax professional on your side, provides peace of mind knowing that the IRS cannot harass you any longer.
The last option is called a federal tax lien removal. This payment option is readily available for taxpayers who consent to pay off their entire tax debt through a direct debit repayment alternative.
Taxpayers can officially request in writing to have the tax lien removed from their accounts once they are set up on the direct debit payment plan. Individuals who receive the withdrawal from the IRS, may need to contact the 3 credit reporting agencies, and provide an update for removal on their credit report files.
If you are uncertain of what payment option to demand under the IRS Fresh Start Program, you might want to work with a tax expert to be sure you understand your options. Your tax specialist can also submit the required IRS forms and assist you in negotiating an affordable payment plan based on your current financial profile.
Making an application for the IRS Fresh Start Program.
Before you submit an application for the IRS Fresh Start Program, you need to follow each and every one of the guidelines outlined by the IRS. You first need to be in compliance with the IRS.
You cannot request any of the repayment options listed above if you have unfiled taxes. And, once all of your unfiled taxes have been filed, you must timely file all your tax returns moving forward while in the IRS Fresh Start program.
As soon as you file all of your tax returns, you can then go to IRS.gov to enlist in the program utilizing the Online Payment Agreement tool. This tool enables you to pick the repayment choice in which you are interested. If you choose not to enroll online, you can request to be part of the IRS Fresh Start Program by submitting and sending IRS Form 9465, which can be discovered on IRS.gov.
Just so you know, applying for the Fresh Start program can be a complicated undertaking that you may not understand, or be prepared to provide the right information for approval. To ensure you are enrolled successfully in an affordable payment plan that best fits your financial situation, you should speak with an experienced Federally Licensed Tax Specialist first.
A tax specialist can assist you in gathering and preparing the correct documentation requested. How you convey your income, expenses, assets, etc., are detrimental in determining your eligibility for the IRS Fresh Start program. As a result, a tax specialist can also help prevent you from revealing information incorrectly, that could be used against you; creating red-flags for an IRS audit.
If you have a tax problem and need to be sure you understand your options, call Fox Tax Solutions at (281) 369-4489, or Schedule Your Free Tax Strategy Analysis today.