IRS Fresh Start Programs | Can You Take Advantage?| Flat fee Tax Service
Updated: May 10, 2019
THE IRS FRESH START INITIATIVE -
FRESH START PROGRAMS The IRS Fresh Start Program Initiative, first announced February, 2011, has had one goal: to make it easier for individuals and businesses to either settle their tax debt or pay their back taxes and penalties. The Fresh Start Initiative has been expanded since then, nd continues to hold true to its original purpose. How exactly will it affect you if you’re struggling to pay up? Listed below how the Fresh Start Program has changed for your benefit. What Is the IRS Fresh Start Program? The image of the IRS is a really well deserved one of intimidation. Whether deliberately cultivated or not, the IRS does little to dispel this perception. Why would they? The power of the IRS is immense and it is in their interest to intimidate taxpayers.
In recent years, the IRS has sought to somewhat reboot the way it interacts with taxpayers, with IRS agents receiving training and instruction in how to assist taxpayers who are in arrears rather than torment them. The IRS is NOT YOUR FRIEND! DON'T EVER FORGET THAT! The IRS Fresh Start program combines penalty relief, installment payments; tax lien releases and a program known as Offer in Compromise that allows some taxpayers to settle their federal tax debts for less than what they actually owe. Easy IRS Installment Agreements
The IRS Fresh Start Program raised the maximum tax owed for taxpayers from $25,000 to $50,000 to qualify for streamlined repayment plans. Under the streamlined installment payment agreement program, taxpayers may establish payment plans online through the Online Payment Agreement page located on the IRS website. Taxpayers who owe more than $50,000 may still establish installment agreements, but must either file a Collection Information Statement (Form 433-A or Form 433-F) or make sufficient payments against their past-due tax balance to bring the total tax owed below the $50,000 threshold. How To Withdraw Notice Of Federal Tax Lien
The Fresh Start Initiative raises the minimum threshold for filing an IRS Notice of Federal Tax Lien on taxes owed from $5,000 to $10,000. The new standard is not retroactive, and the IRS may still impose a federal tax lien against a taxpayer who owe less than $10,000 when the IRS deems that circumstances warrant doing so. To request that the IRS withdraw the Notice of Federal Tax Lien against tax liens that have been released, taxpayers must file IRS Form 12777 – Application for Withdrawal, available on the IRS website. When citing a reason for the request, taxpayers should check the last box which states “the taxpayer believes withdrawal is in the best interest of the taxpayer and the government.”
How To Use an Offer in Compromise to Settle IRS Tax Debt. An Offer in Compromise, according to the IRS Fresh Start Program allows taxpayers to settle their IRS tax debt for less than the total amount owed. The IRS only allows taxpayers to obtain the ultimate optimum tax relief option under the Offer in Compromise program (#OfferinCompromise) in circumstances where requiring repaying the full back taxes owed would constitute an undue burden or in cases where taxpayers demonstrate that they will be unlikely ever to be able to pay the full amount owed. FLAT FEE TAX SERVICE, INC. CLIENTS HAVE A 90% IRS SETTLEMENT SUCCESS RATE. PER 2016 IRS STATISTICS, THE IRS APPROVED APPROX. 42% OF THE 80,000 OFFER IN COMPROMISE SUBMISSIONS. The IRS Fresh Start Initiative has established more flexible standards in evaluating the financial standpoint of taxpayers who request relief under an Offer in Compromise. As a result, more taxpayers have been able to take advantage. To be eligible for relief under the Offer in Compromise program for grounds other than Doubt as to Liability, taxpayers must meet all of the following conditions:
1. A taxpayer cannot have an open personal or business bankruptcy petition 2. All required tax returns must have been filed (No Unfiled Tax Returns). 3. All required tax payments for the current year must be paid. 4. Business owners with employees must have made current quarterly tax payments.
An Offer in Compromise may be either for a single lump-sum payment or for installment payments. To request an Offer in Compromise, taxpayers must submit Form 433-A (OIC) for individuals or Form 433-B (OIC) for businesses along with either $186 to cover the application fee and either a payment of 20 percent of the proposed lump-sum payment or an amount equal to the first proposed monthly installment payment. Individuals and sole proprietors who qualify under Low Income Certification guidelines set by the IRS are exempted from paying the application fee. New Installment Guidelines according to Fresh Start Program
IRS Installment Agreements allow a person to make monthly payments on their tax debt if they can’t afford to pay the total at once, and/or aren’t eligible for an Offer in Compromise. In the past, once an individual’s tax balance reached $25,000, the IRS began conducting a financial analysis of the person’s income and expenses to determine how much the taxpayer would pay per month. Additionally, a Notice of Federal Tax Liens was filed.
Under the Fresh Start Initiative, more taxpayers will be able to avoid this invasive process altogether, as the tax balance threshold has been raised to $50,000. At that point, once the installment agreement (#IRSInstallmentAgreements) process is started, you’ll now have six years to pay the debt off. If you are considering entering an installment agreement, let us know and we’ll make sure you qualify. Notice of Federal Tax Liens and the Fresh Start Program
If an individual fails to pay their tax debt the government can file a claim against that person’s property with a federal tax lien. Property can include everything an individual owns, including real estate, vehicles and financial assets.
Similar to installment agreements, FSI has raised the Notice of Federal Tax Lien filing threshold to $10,000 from $5,000. The IRS might still choose to file at an amount less than $10,000, but it’s not as automatic as before.
How the IRS Fresh Start Program can help with your Tax problems
While none of these alternatives represents an easy tax relief option, each of them does provide a viable avenue for tax settlement. If you have been struggling to pay your federal income tax debt, investigating possible assistance under the IRS Fresh Start Tax Relief program is definitely worth your while, either on your own or with the assistance of a tax professional. You may find that your overall tax burden is significantly reduced.
Wondering if you’re eligible and qualified ? Give us a call.
If you’re struggling with paying your tax debt, don’t know how to fill out an Offer in Compromise or don’t know which forms to file, contact our IRS tax relief firm today. We’ll help you take advantage of the Fresh Start Initiative, and deal with the IRS so you don’t have to.
FLAT FEE TAX
GOOD PEOPLE -
DOING GREAT WORK
A PLUS RATING