IRS Fresh Start Programs: Everything Know About It

by Sadan SEO Sadan SEO

The Internal Revenue Service's (IRS) Fresh Start Programme is an option for settling large tax debts at a manageable interest rate and monthly payment over time. The Internal Revenue Service had a fearsome reputation in the bad old days. Whether intentionally or not, the IRS failed to dispel this impression. The Internal Revenue Service (IRS) has started teaching agents to aid delinquent taxpayers rather than harass them.

Some taxpayers may be eligible to settle their federal tax arrears for less than they owe under the Offer in Compromise programme, which is part of the IRS Fresh Start programme. Here we discuss IRS fresh start programs.

How do you get involved with the Fresh Start Initiative?

You must communicate directly with the IRS to apply for an Offer in Compromise or an instalment plan. The IRS Form 656 Instruction Booklet is required for offers in compromise. It's possible to apply for a payment plan instalment online.

You may employ a tax relief business to get the most out of the IRS fresh start programs and your other alternatives for tax debt settlement. Check out our list of the top tax relief firms to get an idea of where to begin your search.

Four different methods of payment:

The Internal Revenue Service offers four distinct pathways through IRS fresh start programs. Which one is best for you is conditional on the details of your situation.

Instalment agreement:

After getting the OK from the IRS, you can pay off your tax debt in manageable monthly instalments. The IRS will keep adding interest to the deficit. However, any existing federal tax liens or levies will be lifted after three direct instalment payments have been made and the overall tax debt balance has dropped below $25,000.

Not Collectible at the Moment:

You can put your payments on hold during financial hardship by obtaining this status. To qualify, you must demonstrate that it would take much work to generate the money for your daily expenses and tax debt. Rather than cancelling outstanding tax obligations, this status postpones payment until the taxpayer's financial situation improves.

Presenting Your OIC:

With OIC, eligible taxpayers can negotiate a reduced settlement amount instead of making a full payment. You must fulfil the following criteria to be considered for participation:

You have completed your tax filings and projected revenues for the year.

There is currently no active bankruptcy case involving you.

You are eligible to file a current-year extension because of this.

The Internal Revenue Service (IRS) will demand proof that you have deposited taxes for the current and preceding two quarters if you are self-employed.

Penalty abatement:

It's possible to get your tax penalties reduced or even waived if they're excessive. The Internal Revenue Service (IRS) needs explanations for unpaid tax bills. The Internal Revenue Service (IRS) may waive penalties if they determine you have a valid excuse for your current tax liability. It's easy to rack up fines. Removing those fines puts you in a better position to pay down your tax debt or save regularly.

Conclusion:

If you're having trouble paying your taxes, you have a few choices under the IRS fresh start programs. If you need clarification on whether this is the best course of action, you should talk to an accountant or tax specialist about your options for tax settlement.