Understanding the IRS Fresh Start Program- How It Helps Taxpayers Resolve Their Debt and Start Fresh

How does IRS Fresh Start work?

The IRS Fresh Start program is designed to provide relief to taxpayers who are struggling with tax debt. This program offers several options to help individuals and businesses manage their tax obligations more effectively. In this article, we will explore how the IRS Fresh Start program works and the benefits it provides to eligible taxpayers.

Understanding the IRS Fresh Start Program

The IRS Fresh Start program was introduced in 2011 to help taxpayers who are unable to pay their tax debts in full. It provides a variety of solutions, including streamlined installment agreements, expanded offers in compromise, and increased flexibility for taxpayers to resolve their tax debts.

Streamlined Installment Agreements

One of the key components of the IRS Fresh Start program is the streamlined installment agreement. This option allows eligible taxpayers to pay their tax debt over time, without having to provide detailed financial information. To qualify for a streamlined installment agreement, taxpayers must owe less than $50,000 in combined tax, penalties, and interest, and have filed all required tax returns.

Expanded Offers in Compromise

Another important aspect of the IRS Fresh Start program is the expanded offers in compromise. An offer in compromise allows taxpayers to settle their tax debt for less than the full amount owed. Under the Fresh Start program, the IRS has increased the financial criteria for qualifying for an offer in compromise, making it more accessible to a wider range of taxpayers.

Increased Flexibility for Taxpayers

The IRS Fresh Start program also provides increased flexibility for taxpayers to resolve their tax debts. This includes a longer period to pay the debt under an installment agreement, and a higher debt amount that can be settled through an offer in compromise.

Eligibility Requirements

To be eligible for the IRS Fresh Start program, taxpayers must meet certain requirements. They must be in compliance with all filing and payment requirements, and not be currently subject to a levy or other enforced collection action. Taxpayers must also be current on their tax filings and payments for the past three years.

Benefits of the IRS Fresh Start Program

The IRS Fresh Start program offers several benefits to eligible taxpayers, including:

– Reduced financial stress by providing a manageable payment plan.
– Improved credit scores as tax debt is resolved.
– Reduced risk of wage garnishment, liens, and other enforced collection actions.
– Peace of mind knowing that there is a solution to tax debt problems.

Conclusion

The IRS Fresh Start program is a valuable resource for taxpayers struggling with tax debt. By providing streamlined installment agreements, expanded offers in compromise, and increased flexibility, the program helps taxpayers manage their tax obligations more effectively. If you are facing tax debt, it is important to explore the options available under the IRS Fresh Start program to find the best solution for your situation.