Tell me about the IRS Fresh Start initiative?

Contrary to what you thought, this initiative is not new. In 2011, the IRS started to enforce its rule for tax debt, which did not include the federal tax lien. It aims at giving tax infractions a chance of putting things back together. The IRS fresh start program aimed to allow debtors to negotiate with the IRS on a payment plan that they feel is manageable for them without the stress and weight of an impending tax lien.

The initiative also offers certain taxpayers the ability to have their debt partially forgiven if they make a good-faith effort to repay it. This is especially beneficial for those who may have fallen behind on their payments due to extenuating circumstances. The IRS has stated that they are willing to work with taxpayers who are genuinely trying to resolve their debt, and the Fresh Start initiative is one way they are doing so.

If you think you might benefit from the Fresh Start initiative, contact Damiens Tax Law to discuss your options.

Is the IRS Fresh Start initiative legitimate?

The IRS Fresh Start initiative is a government program. Although not everyone qualifies for the IRS fresh start program because it depends on your tax situation and the total amount of tax debt you owe.

If you’re behind on your taxes or have a tax debt, the IRS Fresh Start program can help you catch up. The program has expanded since it first launched in 2011 to make it easier for people with smaller amounts of back taxes to pay off their tax debt.

The most important question taxpayers ask the IRS is how the agency can help them with their tax debt. The answer to this may be the Fresh Start initiative. This program allows certain taxpayers to have their debt partially forgiven if they make a good-faith effort to repay it. This is especially beneficial for those who may have fallen behind.

Is there really a Fresh Start program with the IRS?

IRS has been offering Fresh Starts for years now. One requirement is that the taxpayer must owe less than $50,000 in outstanding tax debt. The IRS has also increased its Offering In Compromises program to provide more flexibility, and they have relaxed the number of federal tax liens filed each year.

The IRS fresh start is an IRS program that allows some taxpayers to have their tax debt partially forgiven if they agree to make a good-faith effort to repay it. This is especially beneficial for those who may have fallen behind on their payments due to extenuating circumstances.

How much will the IRS usually settle for?

The IRS accepts a small percentage of offers in compromise proposals from taxpayers for past tax payments every year. The IRS decreases the debts due to taxpayers as part of the payments for settling their taxes. The IRS's annual list of total compromises approved in 2019 is 16176.

Relaxing tax lien filing criteria and installment agreement terms

The government recently rolled back the number of tax liens filed against taxpayers and allowed taxpayers breathing room during the covid pandemic. The Fresh Start program gives taxpayers six years to make payments to pay off their existing balances. The new law provides discretionary expenditures if a taxpayer can make full payment within six years. The old rules for the IRS Fresh Start program required that a taxpayer's offer in compromise (OIC) be paid in five installments or less, and under new rules, it can but up to 24 months of period payments on an offer in compromise.

People who qualify for the program

The taxpayers eligible under the program can pay their taxes by paying for a fixed time frame with a specific amount determined according to a repayment structure. A further grace period of six months is possible for taxpayers without the need for costly tax penalties. Even business owners can use this program.

How long is the IRS Fresh Start Program?

The IRS has reorganized the ability to obtain installment payments by introducing the fresh-start program. The new rule allows the taxpayer to pay directly through direct debit for 72 months. The old rules only allowed for a maximum of 60 months. If you are approved for the program, the IRS will work with you to set up a payment plan.

How does the program work?

The federal government is adjusting policies to file a federal tax lien on tax debt with the fresh start program.

Applying for the IRS Fresh Start program

The new start program requires that all individuals submit all their tax filings according to the IRS guidelines, or at least the last six years of tax filings. It can be difficult to obtain a repayment option if your taxes are not due. You must file your return as promptly if you want to participate in the Fresh Start program.

IRS Fresh Start Program Repayment Options

The program provides taxpayers with three repayment alternatives for legal and satisfactory relief from taxes. It also assists in avoiding future penalties or interest that may cause monetary difficulties.

Changes to the Offer in Compromise Program

This year, the IRS announced additional changes. These reforms have helped more taxpayers access OIC programs. The IRS has increased the amount of the allowed allowance for expenses for a new year and a new income bracket for taxpayers. This change was the biggest and recalculated the tax return for the eligible taxpayers by reducing the amount of offers for future earnings using a shorter timeline.

Other options

Initially, the question should be, how much of the debt could be repaid? If you're facing a tax liability, then you should consider penalty abatements and tax return amendments, and requests for redress or audits. If the IRS has refused to refund any tax owing to the taxpayer, there are other methods of determining a tax refund.

If you think you qualify for the IRS Fresh Start Initiative, you should reach out to a local tax professional to ensure that you qualify. A tax professional will help you through the process and also let you know of any other options that might be available to help reduce your tax debt.