How to Qualify for the IRS Fresh Start Program

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The IRS Fresh Start Program is a valuable initiative designed to assist taxpayers in resolving their back taxes and getting a fresh start with their tax obligations. This program offers various options and flexibility for individuals and businesses struggling with tax debt. To qualify for the IRS Fresh Start Program, taxpayers must meet specific criteria and comply with certain requirements. Here is an overview of how to qualify for the program along with answers to some frequently asked questions.

Qualifying for the IRS Fresh Start Program:

1. Filing Requirements: To be eligible for the program, you must have filed all required tax returns. This includes both individual and business tax returns.

2. Payment Compliance: You must also be current with your estimated tax payments and federal tax deposits for the current year.

3. Tax Debt Limit: The total amount owed in tax debt must be $50,000 or less. This includes both the tax liability and any interest and penalties.

4. Installment Agreement: If you can’t pay your tax debt in full, you must agree to set up a direct debit installment agreement (DDIA) or a payroll deduction agreement (PDA).

5. Payment Terms: The installment agreement must be structured to pay off the tax debt within six years or before the Collection Statute Expiration Date (CSED), whichever comes first.

6. Financial Statements: In certain cases, the IRS may require you to submit a financial statement to determine your ability to pay the tax debt.

7. Compliance with Tax Laws: You must agree to comply with all future filing and payment requirements while in the program.

8. No Bankruptcy: If you have filed for bankruptcy, you are not eligible for the Fresh Start Program.

FAQs:

1. Can I apply for the Fresh Start Program if I owe more than $50,000 in tax debt?

No, the program is specifically designed for taxpayers with a total tax debt of $50,000 or less.

2. What if I can’t afford the monthly installment payments?

If you cannot afford the monthly payments under the Fresh Start Program, you may explore other options such as an Offer in Compromise or requesting currently not collectible status.

3. Can I still qualify if I have multiple years of unfiled tax returns?

No, all required tax returns must be filed and up to date to be eligible for the program.

4. Will joining the program stop interest and penalties from accruing?

No, interest and penalties will continue to accrue until the tax debt is fully paid off.

5. Can I apply for the Fresh Start Program online?

Yes, you can apply online using the IRS Online Payment Agreement tool or by completing Form 9465, Installment Agreement Request.

6. Will the IRS release tax liens if I join the program?

The IRS may consider releasing a tax lien if you meet certain conditions, such as making three consecutive direct debit payments.

7. Can I negotiate a lower amount to pay under the Fresh Start Program?

In some cases, the IRS may accept an Offer in Compromise, allowing you to settle the tax debt for less than the full amount owed.

8. Can I apply for the program if I am currently in an existing payment plan?

Yes, you may be able to modify your existing payment plan to meet the requirements of the Fresh Start Program.

By understanding the qualification criteria and complying with the requirements of the IRS Fresh Start Program, taxpayers can take advantage of the opportunities it offers to resolve their tax debt and start anew. It is always advisable to consult with a tax professional for personalized guidance and assistance in navigating the program successfully.
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