Back Tax Debt Relief
Last year the IRS filed over 2.6 million and over 900,000 federal tax liens.
The good news, IRS is finally ready to help taxpayers with the Fresh Start Program.
If you are struggling with Back Tax Debt there may be a program just right for you.
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Last year the Internal Revenue Service initiated some tax programs that offers taxpayers back tax debt relief. This new program is called the IRS fresh start.
Unlike prior years the Internal Revenue Service is starting to realize rather than punishing taxpayers with levies and liens they can both help the taxpayer and help themselves by relieving some of the pressure put on taxpayers below back tax.
The three new programs initiated by the Internal Revenue Service are helping people with the federal tax liens, the settlement program, and installment agreements.
These changes have really helped struggling taxpayers with their back tax debt.
As a former IRS agents and instructors with the Internal Revenue Service it is a long time coming but IRS is finally starting to work with taxpayers who have back tax debt.
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 for Back Tax Debt Relief
Federal Tax Liens.
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Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a Direct Debit installment agreement.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.
Installment Agreements.
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, Form 433-A or Form 433-F.
Offers in Compromise.
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. as a former IRS agent and tax instructor I would caution all individuals trying to file an offer in compromise on their own. They are much more complicated and complex than people think. Your best chance of getting your offer in compromise accepted is through a legitimate tax professional.
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 Internal Revenue Service receives approximately 60,000 offers a year and accepts approximately 38% of them.
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.
Use the Offer in Compromise Pre-Qualifier tool on IRS.gov to see if you may be eligible for an OIC. You may also find the IRS pre-qualifier tool right on our website.
These are not the all-encompassing programs that are used by the Internal Revenue Service. Contact us today to learn more about your particular case and how we can permanently settle your IRS problem.
Contact us today for a free initial tax consultation and speak to a truly qualified tax professional to help your back tax debt.
