The Internal Revenue Service, also known as the IRS, launched the Fresh Start Initiative in 2011. You might find yourself asking, “Well, what is the IRS Fresh Start Program?” Allowing taxpayers to pay off substantial sums of money owed in adorable ways, the program gives leeway to taxpayers with things like repayment options and more. Based on an individual’s income and the value of their liquid assets, the program was designed to change the laws when it came to the IRS collecting large sums of tax debt when taxpayers can’t outright pay a lump sum.
The Fresh Start Program was initially launched to assist people still struggling from the recession, but now, the initiative helps taxpayers avoid having tax debt and things like tax liens, interest, penalties, asset seizures, bank and wage garnishments.
For people struggling with tax debt, tax relief companies as well as the IRS provide all the information you need for the Fresh Start Initiative and what to do when it comes to repayment options and settling tax debt the right way. By offering various measures to help settle tax debts quickly and with ease, the IRS Fresh Start Initiative reduces the burden of tax debt for individuals and small businesses during financial difficulties. Avoid excessive financial hardships by finding out how the FSI can help you.
Offer in Compromise
As a part of the IRS Fresh Start program, they have a program called Offer In Compromise. Taxpayers who qualify for this may only be required to pay a portion of their outstanding debt owed if they cannot repay the tax debt in full. If a taxpayer qualifies, the OIC program grants a person to settle their debt for a reduced amount. Now, the IRS only looks at only one year of future income versus four years when it comes to Lump Sum OIC Payments and only two years of future income versus five years when it comes to Short-Term OIC Periodic Payments.
While you won’t be paying pennies on the dollar, there’s a complicated formula to determine if you’re eligible for the Officer in Compromise program that tax relief companies specialize in determining. The IRS takes into consideration a number of factors like your monthly income, allowable monthly living expenses, available equity in assets and more. Making a reasonable offer is also extremely important when it comes to utilizing the OIC.
Economic Hardship Installment Agreement Plan
If you don’t qualify for an Offer in Compromise, some taxpayers qualify for an IRS Fresh Start Economic Hardship Installment Agreement. For people who can’t pay large monthly payments and pay off their debt within the ten year collection statue, the IRS can allow you to make smaller payments. Similar to the OIC, the IRS factors in things like your income and more. In order to request an Economic Hardship Installment Agreement, the taxpayer needs to provide detailed financial information which is best done with the help of tax relief companies and professionals.
Streamlined Installment Agreement
As a part of the IRS Fresh Start initiative, the Streamlined Installment Agreement allows taxpayers a way to quickly set up an installment agreement, which helps them repay back taxes over a fixed period with a fixed payment every month. This option can typically be done without providing any more financial information and is only available to individual tax debt. Streamlined Installment Agreements usually are 36 months for those who have a balance of $10k or less, 72 months for those who owe $50k or less and an 84 month option for those who owe between $50k and $100k. Tax relief companies and professionals can help taxpayers decide what option suits them best and how to go about choosing one.
Currently Non Collectible Status (CNC)
Lastly, another option with the Fresh Start Initiative includes the Currently Non Collectible status, which means your economic hardship is enough that you don’t have the ability to make any payments to the IRS in regards to your debt. This temporary hold suspends any collection against taxpayers, but taxpayers are typically requested to send updated financial status reports every two years. The 10 year collection statute continues even with this option.
Since the IRS Fresh Start Initiative is generally available for both business tax debt and individual tax debt, it’s best to take advantage of your tax issues with the help of tax relief service companies to know what options are best suited for your situation.