The IRS Fresh Start Program is an actual set of IRS tax relief programs introduced and revised by the agency. Here is what you need to know in order to determine if the IRS Fresh Start Program is an option for you.
The IRS Fresh Start Program is an actual set of IRS tax relief programs introduced and revised by the agency. This includes a Lien Program, an Installment Payment Plan and an Offer in Compromise program.
The IRS Fresh Start Programs are:
Fresh Start Lien Program - is a program designed to provide relief to taxpayers who have IRS tax liens filed against them.
Fresh Start Installment Agreement - is a program designed to provide taxpayers with a method to enter into an agreement to pay taxes over a period of time.
Fresh Start Offer In Compromise - is a program designed to provide relief to taxpayers that will not be able to pay the IRS the full amount of taxes due over a certain period of time.
Let's take a look at the nuts and bolts of the tax releif provide under each of these programs offered under the IRS Fresh Start Initiative.
Fresh Start Lien Program
Having a Federal Tax lien against your property can be devastating. A lien is reflected on your credit report and also serves to hindering you in some cases to sell or refinance your home. It is part of the public record that shows interested parties that the IRS has a claim against you.
Here are some changes that the IRS has made under the Fresh Start Initaitve to ease the burden on some taxpayers:
The Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien.
When a taxpayer meets certain requirements and pays off their tax debt, the IRS may now withdraw a filed Notice of Federal Tax Lien.
When the IRS withdraws the notice of federal tax lien, it abandons its secured-creditor standing. The withdrawal of the notice hat your tax debt has been resolved.
The lien itself is only released if the tax debt has been satisfied or our time to collect your liability has expired.
This form is normally used to request a withdrawal ...
Fresh Start Installment Agreements
Generally, if you owe less than $50,000 to the IRS, you can get into a repayment agreement by providing financial information provided that you are able to fully repay the debt in five years. A taxper can enter into a traditional installment agreement or in some cases they are encouraged to use other options such as :
Direct Debt Installment Agreements
If the amount that you owe is $25,000 or less, the Internal Revenue Services may allow allow lien withdrawals if:
Fresh Start Offer In Compromise
Filing an offer is the initiation of legal action in which you are making a legal claim that you have a limited abability to pay the IRS
Allowing a firm to prepare this incorrectly for you can possibly lead to serious issues with the denial or acceptance of your filings. It is also important to know that the IRS uses a standard formula for calculating an offer in compromise in order to determine "Reasonable Collection Potential".
This is program the IRS changed reasonable collection potential calculations from multiplying your discretionary income by a more favorable factor. Filing an offer in compromise is not like filing a tax return.
Also keep in mind that when an offer in compromise is submitted, the statute of limitations on collections is tolled, which means that it stops running.