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What Is the IRS Fresh Start Program?
The IRS Fresh Start Program is an umbrella term for the debt relief options offered by the IRS. The program is designed to make it easier for taxpayers to get out from under tax debt and penalties legally. Some options may reduce or freeze the debt you’re carrying. Others make it possible to pay off what you owe in smaller chunks over a period of time. The Fresh Start Program is a collection of changes to the tax code. It offers varying levels of relief and repayment options based on the specific financial situation of each applicant. The IRS launched the Fresh Start initiative in 2011 for the purpose of helping more taxpayers to get back in good standing. The program emphasizes facilitating reasonable repayment options over enacting penalties. Yes, taxpayers benefit because they may be able to pay off taxes while avoiding liens, levies, wage garnishments, and jail time. The IRS also benefits because it is able to collect “something” instead of nothing from taxpayers. Here’s a look at what’s included under Fresh Start:
- Offer in Compromise (OIC).
- Installment Agreement (IA).
- Currently Non Collectible (CNC).
- Penalty Abatement.
It’s going to take sitting down with a tax professional to decide which option is suitable for you. The IRS will require detailed financial information that proves that you qualify for one of these relief options. Factors like bankruptcy, active wage garnishments, and tax liens could complicate things. Keep reading to see if you qualify for a new start with the IRS.
Do I Qualify for the IRS Fresh Start Program?
First, you should know that the IRS has designed its Fresh Start tax program to be available to everyone. The fact that there’s so much variety within the program means that you’ll likely find at least one suitable channel for debt relief. However, the complexity of the IRS Fresh Start initiative does mean that you have everything to gain by working with a tax professional when exploring what’s available to you.
The one hoop you will need to jump through involves current tax returns. The IRS requires you to be fully current will all tax returns before you’ll be considered for the Fresh Start program. You also must have the correct amount of withholdings for the current year. This is the IRS’s way of making sure it can trust taxpayers to be accountable.
IRS Fresh Start Program Qualifications
The IRS Fresh Start tax initiative is generous and inclusive. However, there are some basic requirements to know about. Here’s what it takes to qualify:
- Self-employed individuals must prove a drop of 25 percent in net income.
- Joint filers can’t earn more than $200,000 annually.
- Single filers can’t earn more than $100,000 annually.
- Your tax balance must fall under $50,000 before the year’s end.
The underlying requirement is that you must apply for the option you think is appropriate for your situation. The IRS won’t automatically apply the Fresh Start program to your tax debt just because you qualify. The IRS charges interest on tax, penalties, and interest until the balance is paid in full, so it’s crucial to apply or get help as soon as you can.
How Does the Fresh Start Program Work?
The Fresh Start IRS initiative works by providing a way to settle your debt and avoid penalties. You’ll need to submit the appropriate forms and documentation to the IRS to get started. You will then set up a plan for going forward that includes monthly payments, a lump payment, or deferred payments.
How to Apply for IRS Fresh Start Program
The IRS provides eligibility forms for each relief option included in its Fresh Start program. It will be up to you to thoroughly and honestly complete these forms. You can eliminate much of the confusion and stress that can accompany the process by simply getting help from a tax professional. A professional can also help to ensure that you’re following all guidelines and applying to the program that’s the best fit.
How Can Tax Group Center Help?
The Tax Group Center team has been helping people take advantage of the full scope of the IRS Fresh Start program since it was first launched back in 2011. As a result, we’re very familiar with the details of the program. Tax Group Center can help in a number of ways if you’re facing an issue regarding delinquent taxes.
First, we’ll identify any of the potential penalties and interest charges that you need to be on the lookout for between now and when you’re approved for a relief option. Next, we’ll go over the details of your situation with you to identify which option under the Fresh Start tax program is the best fit. We’ll then walk you through every step of the application process to try to increase your chances of being accepted quickly. We’re able to help our clients cover all of the details of the application process because we speak the language of the IRS. What’s more, our team is here to provide support in your tax journey to ensure that you stay in full compliance once you have been accepted into the Fresh Start program. This can include helping you to file your taxes on time going forward to avoid breaching your agreement. Give us a call today to explore how you may be able to get significant tax relief this year under the IRS Fresh Start program.