IRS Tax Relief | IRS Fresh Start Initiative | Flat Fee Tax Service
Updated: Jun 28, 2019
Occasionally, the IRS will come up with a new plan to help taxpayers get back on track with their debts or balances owed to the government.
Currently, that plan is called the Fresh Start Initiative, and it can help taxpayers settle their debts quickly and more easily.
What is the Fresh Start Initiative?
Once known as the Fresh Start Program (#OfferinCompromise), the Fresh Start Initiative is not a program in itself, but rather a series of changes to current IRS Collection and enforcement procedures and policies. It’s designed to help both individual taxpayers and small businesses attempting to settle an overdue tax debt.
The Fresh Start Initiative has features that make it easier for taxpayers to pay back their outstanding balances and avoid tax liens, or have existing liens withdrawn.
How Long Has The IRS Fresh Start Initiative Been in Place?
Prior to the 2012 Fresh Start Initiative, the original IRS Fresh Start Program was put into place in 2008 to help citizens resolve their tax problems and aid those in dire straits. When the IRS modernized the Fresh Start Program, the IRS made things easier for those struggling with unemployment or hard financial times. For example, the penalties for failure to pay taxes on time may be waived for those that have been unemployed for a period greater than 30 days under the guidelines of the IRS Fresh Start Program. Qualified individuals who apply can seek a six month extension to pay, with no fear of penalties.
The two major tax debt payment plans that were simplified under the Fresh Start Initiative include the Installment Agreement and the Offer in Compromise program. The IRS tax relief team at Flat Fee Tax Service, Inc. can help you examine both options, so contact us today.
CALL TODAY (866) 747-7435 FOR TAX RELIEF,
What Is a Fresh Start Installment Agreement?
If you cannot pay your tax debt in full, you can apply for a payment plan with the IRS, known as an installment agreement. An IRS Installment Agreement is granted to taxpayers who would like to pay off their tax debt in smaller monthly increments. This tactic can help reduce penalties like tax levies from unpaid taxes, and the amount paid may be the full debt amount or a lessened value.
BEFORE YOU AGREE TO AN IRS INSTALLMENT AGREEMENT, CONSULT WITH AN
IRS TAX ATTORNEY FIRST.
Agreements with the IRS can be negotiated, but ultimately the amount owed each month is up to the discretion of the Internal Revenue Service. There are a variety of different installment agreements: a streamlined installment agreement, partial-pay installment agreements, and stair-step installment agreements.
Regardless of installment agreement, taxpayers approved for this type of payment plan must be sure to never default or miss a payment.
If you owe more than $50,000 and you can’t reasonably pay your tax debt off within six years, you’ll need to work with a tax professional to devise an installment agreement the IRS will approve. You’ll propose a payment plan that offers the IRS the amount of your monthly income minus your essential living expenses. It’s important to begin sending in monthly payments after presenting your offer; the IRS is more likely to approve an installment agreement if you’re making viable steps towards settling your tax debt. There are numerous ways to pay, but installment agreements do come with fees.
You can make on-line payment, send in a money order or check, pay by credit card, and over the phone, but some of these options are better than others in terms of fees. Currently the fee for an installment agreement can range up to $120, but choosing on-line payment can decrease this fee amount. Direct Debit payments pull money directly from your checking account each month, and this can be a wise route for taxpayers who want to avoid missing a payment unintentionally. So long as the account is open and filled with sufficient funds, you won’t need to worry about making a payment on time.
If you owe more than $50,000, you’ll have to submit both Form 433-F and Form 9465. Keep in mind that a tax debt with an outstanding balance of over $50,000 cannot be completed online; it must be done through mail or in-person.
There is also a small business installment payment agreement for companies that owe less than $25,000 in back taxes. This is known as an In-Business Trust Fund Express installment agreement. You must currently have employees to qualify; if approved, you’ll have 34 months to fully pay off your tax debt. If your debt is under this threshold but over $10,000, you must pay through a Direct Debit installment agreement. This can be a great option for a start-up business that has found itself in trouble during its first few years of operation.
Keep in mind that you cannot default on your payment agreement; should you miss a payment, you may face a failure-to-pay penalty and the Internal Revenue Service could revoke your installment agreement.
What is the Fresh Start Initiative Offer in Compromise?
An Offer in Compromise (OIC) is an IRS tax settlement option given to taxpayers who are unable to pay the full amount of taxes they owe. An IRS settlement agreement program can be a useful tool for taxpayers that have found their tax debt to be insurmountable. If a financially distressed taxpayer can prove that paying off the entirety of their debt would cause undue financial hardship, the IRS may consider reassessing the amount of debt owed.
HOW MUCH WILL AN OFFER IN COMPROMISE COST?
How Do I Qualify for a Fresh Start Offer in Compromise?
This compromise is only offered if the IRS determines the tax debt unlikely to be collected. An IRS settlement through the Offer in Compromise program will only be accepted if the IRS believes the money gained from it will be greater than or equal to the amount they could realistically expect to receive from a taxpayer. There are various stipulations that come along with this rare offer, but Flat Fee Tax Service, Inc. has helped many taxpayers decrease the amount of money owed through this IRS system.
FLAT FEE TAX SERVICE, INC. CLIENTS HAVE
A 96% IRS SETTLEMENT RATE
PER 2016 IRS STATISTICS, THE IRS APPROVED APPROX. 42% OF ALL OFFER IN COMPROMISE SUBMISSIONS
YOU HAVE A 30% CHANCE AT SUCCESS IF YOU SUBMIT YOUR OWN OFFER IN COMPROMISE
THERE ARE APPROX. 80,000
OFFER IN COMPROMISE SUBMISSIONS
Call us today at (866) 747-7435 to determine if you qualify.
If you choose to file an offer in compromise through that IRS settlement program, the government will assess your unpaid tax and analyze whether or not you’ll be able to pay back your full debt.
IT IS THE JOB OF THE IRS TAX LAWYERS AT FLAT FEE TAX SERVICE, INC. TO PROVE YOUR INABILITY TO PAY YOUR TAX DEBT.
If the IRS decides your current and future income insufficient to feasibly handle your outstanding balance, they may agree to settlement that’s lower than your original overall tax debt.
Are There Limitations on Who Can Use the Fresh Start Initiative?
There are varied limitations on who can receive this tax penalty reprieve, and some of the most common include:
Those who are self-employed must provide proof of a 25 percent drop in their net income.
Taxpayers can’t earn more than $200,000 per year for married couples filing jointly or $100,000 for single filers.
Your tax balance must be below $50,000 at the end of the year to qualify.
There are various other limitations, but our IRS Tax relief team can guide you through the ins and outs of the Offer in Compromise process and help you determine which course of action is right for your financial situation.
How Long Will a Fresh Start with the IRS Take?
Every case is unique, but as a general rule it’s not uncommon for the Fresh Start Initiative process to take several months. There have been cases that can require a year for completion. Our team will work hard to expedite the process for you, so call us today at (800) 589-3078.
Can the IRS Reopen My Debt After a Fresh Start Initiative Settlement?
Yes, a Fresh Start Initiative settlement can be reassessed even after it has been paid. The Fresh Start Initiative isn't a complete "Get Out Of Jail Free" card, but it's pretty darn close.
The IRS requires that you finish your payments for the settlement and continue to file and pay all taxes for five years after completing the terms of your settlement package. If you fail to do so, the IRS will likely pursue the full amount of taxes originally owed.
One problem many taxpayers in debt to the IRS face is keeping up with the changes in programs like the IRS Fresh Start Program. There are many details in the Installment Agreements, Offers in Compromise and other resolution options that can be tough to know.
Some of the changes enacted by the IRS may not impact all individuals in debt and it’s difficult to know whether you fall in that group or not. The new updates to the Fresh Start Initiative are yet another set of rules to keep straight when trying to resolve tax problems.
FLAT FEE TAX SERVICE, INC.