Are you or have you ever been overwhelmed by the taxes that you owe? Are you looking for a way to get back on your feet without having to pay an arm and a leg worth of interest rates, penalties, and fees? If so the IRS Fresh Start Program is a great option for individuals and businesses who are seeking relief from their tax debt. This federal relief program contains 4 main programs that go into producing the results many taxpayers strive for.
Offer In Compromise
An Offer in Compromise is a proposed settlement with the IRS. It typically involves paying off your tax debt for less than what you owe, but without filing for bankruptcy. The IRS will take into account factors like income and expenses when they determine whether or not to accept an offer from you. You may also be able to combine the offer of compromise with other repayment options such as Installment Agreement or Payment Plan.
Even if it seems that the government is offering a great deal, make sure that this option is best for you before taking them up on their offer! There might be something else out there that would work better for your financial situation. The IRS will take into account a variety of factors, including your ability to pay, income, expenses, and asset equity.
An installment agreement with the IRS allows taxpayers with combined tax liabilities to come up with a payment plan designed on their own timeline. There are many benefits associated with this kind of agreement.
Though it is preferred that taxpayers should pay their liabilities in full, people who are having trouble with the IRS and their taxes owe it to themselves to look into an installment agreement. It can give them the time they need in order to make a payment plan that is manageable for them.
Currently Not Collectible
If the IRS determines that you are unable to pay any portion of your tax debt, your account may be marked as Currently Not Collectible, delaying collection until your financial situation improves. The fact that your debt is Currently Not Collectible does not mean it will go away; it just means the IRS has assessed that you cannot afford to pay it at this time.
You are still obligated to file tax returns and keep records of any income earned during this period, but your debt cannot be collected until the IRS deems it currently collectible again. Additionally, interest continues to accrue on your existing outstanding balance at a rate determined by law.
IRS Penalty Abatement
The fourth program is Penalty Abatement. This status suspends the collection of late-payment penalties and prevents levy/garnishment actions taken by the government when a taxpayer cannot pay their tax debt in full, or even at all. The government will also not attempt to collect any interest that has accumulated on your account since you first became a CNC account.
This program is different from Currently Not Collectible, because penalty abatement suspends penalties and interest on the debt, whereas CNC is simply the IRS terminating their attempts to contact and seek collection from you.
A Fresh Start
The IRS Fresh Start Program is an effective way to take control of your tax situation. This program offers a variety of solutions for taxpayers who are struggling with unpaid taxes, and ensures that you will not be penalized or face additional penalties if you qualify for the program. So what are you waiting for? The time to begin this process is now!
How Simple Is Qualifying?
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.