IRS Fresh Start Program
In 2011, the Internal Revenue Service (IRS) launched the Fresh Start Initiative. With the IRS Fresh Start program, a taxpayer can enter into a payment plan for 72 months for any assessed balance up to $50,000. The program also allows taxpayers to be placed on affordable payments based on their finances, avoid tax liens being filed, have an easier lien withdrawal process, and an updated Offer in Compromise (OIC) program making it realistic for offers to be accepted. Many taxpayers find themselves in a panic each year due to being unable to pay their tax debt. With lack of tax knowledge, many taxpayers do not take advantage of the options available to them to resolve their tax debt.
Available Fresh Start Initiative Programs for Taxpayers:
- Offer in Compromise - The OIC is accepted in higher numbers now than in previous years primarily due to the IRS now only calculating a taxpayer's future income over 12 a month period. In the past, the future income was calculated up to the number of months remaining in the collection expiration statue date. The IRS now also allows expenses such as student loan payments and state installment agreement payments in the calculation of a taxpayer’s monthly living expenses.
- Tax Lien Changes - The IRS will not file a tax lien if the unpaid tax debt is less than $10,000 versus $5,000 as per the previous threshold. Another change regarding tax liens is in some cases now, tax liens can be withdrawn by a taxpayer entering into a Direct Debit Installment Agreement (DDIA) with the IRS for a term of 60 months or less and if the assessed balance is less than $25,000. Once the IRS has debited three direct debit payments out of a taxpayer's account, the taxpayer can request for the federal tax liens to be withdrawn.
Our experienced team of tax professionals consists of tax attorneys, Certified Public Accountants (CPA), Enrolled Agents (EA), and Certified Tax Resolution Specialists (CTRS) who educate and help our clients be in compliance with their tax returns, estimated tax payments if needed, as well as educating clients to prevent recurring future tax debt balances. Our professionals evaluate each client’s financials and personal situation, prepare well-presented arguments, and get you the fresh start that you deserve to move forward with your life. Let us help get your life back with LifeBack Tax.
IRS Fresh Start Program FAQs
The IRS Fresh Start Program has varying qualifications depending on the specific program you apply to. The requirements are generally as follows:
• Your tax balance must be under $50,000 at the end of the year.
• You must be in compliance with the filing of your tax returns.
Yes, the IRS has up to 10 years to collect back tax debt under the 10 Year Statute of Limitations. After 10 years, any debt will be wiped from the IRS' books. However, there are other factors which may extend the 10-year Status of Limitation.
In order to apply for the IRS Fresh Start Program, taxpayers must first ensure they are in compliance with the filing of all tax returns. Once compliance is established, visit the IRS Online Payment Agreement tool to see what relief options you qualify for and proceed. You can also fill out Form 9465 and mail it to the IRS.
Although it is possible to settle with the IRS on your own, the process can be extremely tedious and difficult to comprehend on your own. It is in your best interest to seek the help of an experienced tax professional when applying for the IRS Fresh Start program.
Yes, the IRS Fresh Start program is legitimate debt forgiveness program announced by the Internal Revenue Service (IRS).
Yes, the IRS Fresh Start program does provide relief for taxpayers facing federal tax liens. The Fresh Start program allows eligible taxpayers a lien release if their current outstanding balance is under $25,000. The Offer In Compromise program can also allow for a lien release, once the balance has been satisfied.
Yes, the IRS Fresh Start program can be beneficial for small business owners facing back tax debt. Small business owners who owe under $25,000 can set up a payment plan with the IRS with 2 years (24 months) to pay off the debt.