IRS Fresh Start Initiative: A Guide to the Debt Relief Program
It could be said that the most dreadful consequences of neglecting to pay your tax debt on time are the accrual of penalties and interests that somehow seem to make the existing balance almost impossible to pay. This leads to a downward spiral of a bottomless balance of debt to pay off. The Internal Revenue Service (IRS) realizes that increasing the balance to an already delinquent tax debt would only increase their own outstanding accounts that are owed to them.
The IRS is very much interested in collecting what is owed to them. However, additional fees and penalties are a necessary procedure to encourage taxpayers to pay their debt and avoid defaulting on any payments. For the most part, this method has proven to work, but for those other accounts, it’s not so successful.
Typically, being in an egregious amount of debt toward the IRS can often lead to wage garnishments, car repossession, foreclosure, and even bankruptcy. It is understandable that life can get in the way and certain priorities require a shift in financial distribution. Ultimately, the IRS understands this too. That is why they offer distressed taxpayers the Fresh Start Initiative.
What is the Fresh Start Initiative?
The Fresh Start Initiative program is designed to help taxpayers pay off their debt without having to result to one of the unfortunate financial incidents aforementioned. With this program, taxpayers will be able to afford to pay off their tax debt while avoiding those annoying penalties and interest fees.
How Does it Work?
There are three different features under the Fresh Start Initiative program:
1. Installment Agreement
Here, you can negotiate with the IRS what you can afford to pay them. The IRS will assess your annual income and expenses and present you with a monthly payment installment plan. As a US taxpayer, you have the right to accept, decline, and possibly even counter-offer until you have come to an agreed-upon amount.
2. Tax Liens
If a tax lien has been filed against your property, you have the right to file for a withdrawal if you have paid off your tax debt and met certain requirement. Recently, the IRS has increased the amount that the tax debt a taxpayer must owe in order to get served with a tax lien. According to the IRS, this amount is $10,000. However, there are some rare instances when a taxpayer may still get served with a tax lien even if their balance is below $10,000.
3. Offer in Compromise
The Offer in Compromise is a plan that gives taxpayers the opportunity to pay off their debt for a lesser amount than what is originally owed. In other words, the IRS is willing to reduce the amount of tax debt you owe, IF you can pay the entire amount off. Although this may seem like the better choice, not everyone can qualify for the Offer in Compromise. Extreme circumstances must apply in order for one to be approved for this. However, it doesn’t hurt to try!
NOTE: When communicating with the IRS, it is highly recommended to follow up with a Letter of Explanation. This will serve as a paper trail for any type of correspondence, whether it is by phone or mail.
Hire Success Tax Relief for a Fresh Start!
The Fresh Start Initiative has only three features, but each one requires a thorough investigation and a gauntlet of intricate steps to determine whether or not one qualifies for this program. Success Tax Relief is a tax consulting firm that is all too familiar with these kinds of processes. We are well versed in the business of tax relief and qualified to solve any tax problems you may have with the IRS. So give us a call today at 877-825-1179 or contact us online right now to help you!