About 50% of open cases in the IRS collection inventory can be helped or managed by the IRS fresh start initiative.
Call us for a free initial tax consultation today and you will become well familiar with the system which can be explained very easily and simply to you.
The IRS Fresh Start program makes it easier for taxpayers to pay back taxes and avoid tax liens. Even small business taxpayers may benefit from Fresh Start.
Here are three important features of the Fresh Start program:
Federal Tax Liens
The federal tax lien is a very damaging document filed at the courthouse where your residence is located.
There are a couple of ways to get rid of the federal tax lien. When you call us ,we will review your various options but understand that the IRS collection statute is 10 years.
As a general rule, the tax lien goes away when the debt is either paid in full, the statute expires, you can get a secured installment agreement based on various circumstances, or you file an offer in compromise and meet the acceptance criteria.
The Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien.
That amount is now $10,000. However, in some cases, the IRS may still file a lien notice on amounts less than $10,000.
When a taxpayer meets certain requirements and pays off their tax debt, the IRS may now withdraw a filed Notice of Federal Tax Lien.
Taxpayers must request this in writing using Form 12277, Application for Withdrawal.
Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a Direct Debit installment agreement.
Taxpayers also need to request this in writing by using Form 12277.
If a taxpayer defaults on the Direct Debit Installment Agreement, the IRS may file a new Notice of Federal Tax Lien and resume collection actions.
IRS Installment Agreements
IRS accepts 6.5 million installment or payment agreements a year.
The Fresh Start program expanded access to streamlined installment agreements.
Now, individual taxpayers who owe up to $50,000 can pay through monthly direct debit payments for up to 72 months (six years). While the IRS generally will not need a financial statement, they may need some financial information from the taxpayer.
Taxpayers in need of installment agreements for tax debts more than $50,000 or longer than six years still need to provide the IRS with a financial statement.
In these cases, the IRS may ask for one of two forms: either Collection Information Statement, 1.Form 433-A or 2.Form 433-F.
The IRS Offer in Compromise.
The Internal Revenue Service receives approximately 80,000 offers in compromise a year and accepts approximately 38% of those for average settlement of $7500.
An Offer in Compromise is an agreement that allows taxpayers to settle their tax debt for less than the full amount. Fresh Start expanded and streamlined the OIC program. The IRS now has more flexibility when analyzing a taxpayer’s ability to pay.
This makes the offer program available to a larger group of taxpayers.
Generally, the IRS will accept an offer if it represents the most the agency can expect to collect within a reasonable period of time.
The IRS will not accept an offer if it believes that the taxpayer can pay the amount owed in full as a lump sum or through a payment agreement.
The IRS looks at several factors, including the taxpayer’s income and assets, to make a decision regarding the taxpayer’s ability to pay.
Call us today to find out the truth regarding the IRS fresh start initiative.
Can the IRS Fresh Start Initiative Help You, ASK THE EXPERTS, FREE.
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