The importance of understanding the many facets of the Tax Law cannot be overstated. Anybody who has ever been on the wrong side of the IRS will tell you, it is not a pleasant experience. They don’t take any excuses. One of the ways to stay on top of things is to have a clear understanding of the different IRS programs and payment plans. One of these programs is the IRS Fresh Start Program.
IRS Fresh Start Program
This is an initiative that makes it easier for both individual taxpayers and businesses to clear back taxes, get tax relief and avoid tax liens from the IRS. Under normal circumstances, owing the IRS substantial amounts in back taxes would subject you to unpleasant tax penalties, a possible tax lien or even seizing of property.
If you owe the IRS in taxes, you are not alone. Over 50% of Americans owe Uncle Sam money. Applying for the IRS Fresh Start Program gives you an opportunity to avoid the possibility of a tax lien when repaying the back tax.
Tax relief options under the IRS Fresh Start Program
(1) Installment agreements
Jamie Sanders with Hillhurst Tax Group offers a scenario, “If you owe up to $50,000 in taxes, you may qualify for the IRS installment agreements. This will allow you to repay your back taxes over an extended period of up to 72 months (six years). Under normal circumstances, the IRS would only allow you to repay the debt within three years. This extended installments agreement makes it easier for you to repay your taxes without placing a difficult strain on your finances.”
(2) Offers in compromise
This happens in rare cases. Under an offer in compromise agreement, the IRS can allow you to clear your tax debt for just a small portion of the total. To benefit from this option, you must provide full financial documentation proving that it is physically impossible for you to repay the entire debt.
(3) Tax lien withdrawals
An IRS tax lien can be withdrawn if you meet the criteria in the Fresh Start initiative and agree to a direct debit repayment plan with the IRS. This applies to individual taxpayers or businesses whose tax debt is not more $25,000. If you default on the repayment plan, the IRS can still issue a tax lien notice resume its collection efforts.
If there is an area that you cannot afford to procrastinate, it is paying your taxes. Back taxes can end up affecting your life and your family in a big way. The IRS Fresh Start initiative makes it easier for you to meet the terms your tax repayment agreement and at the same time continue meeting your household obligations without too much pressure.