The Fresh Start Program for Taxes is an initiative introduced by the Internal Revenue Service (IRS) to help taxpayers who are struggling to pay their taxes. This program aims to provide individuals and small businesses with a fresh start and a chance to resolve their tax issues.
The Fresh Start Program was launched in 2011 and has since helped thousands of taxpayers to settle their outstanding tax debts. It provides several options for taxpayers to make their payments more manageable and offers relief from penalties and interest.
One of the key features of the Fresh Start Program is the installment agreement option. This allows taxpayers to pay their tax debts in monthly installments over an extended period of time, typically up to 72 months. This option is particularly helpful for those who cannot afford to pay their taxes in full.
Another option provided by the program is the offer in compromise (OIC). This allows taxpayers to settle their tax debts for less than the full amount owed. To qualify for an OIC, taxpayers must demonstrate that they are unable to pay the full amount and that the offered amount represents the maximum they can pay.
Additionally, the Fresh Start Program offers relief from tax liens. Taxpayers may qualify for a lien withdrawal if they meet certain criteria. A lien withdrawal removes the public notice of the tax lien and helps individuals and businesses to rebuild their credit.
Now, let’s address some frequently asked questions about the Fresh Start Program:
1. Who is eligible for the Fresh Start Program?
The program is available to individuals and small businesses who owe $50,000 or less in tax liabilities.
2. How do I apply for the installment agreement?
To apply, you need to complete and submit Form 9465, Installment Agreement Request, along with your tax return or separately.
3. Can I still apply if I owe more than $50,000?
Yes, you can still apply, but you will need to pay down your balance to $50,000 or less before the IRS can approve your application.
4. How do I know if I qualify for an offer in compromise?
The IRS evaluates various factors, including your income, expenses, asset equity, and future earning potential, to determine if you qualify for an OIC.
5. Can I negotiate the amount I owe with the IRS?
Yes, through the offer in compromise option, you can negotiate a lower amount to settle your tax debt.
6. Are there any fees to participate in the Fresh Start Program?
Yes, there is a fee for setting up an installment agreement. However, low-income taxpayers may qualify for a reduced fee or a waiver.
7. Will participating in the program stop the IRS from taking enforcement actions?
Yes, as long as you comply with the terms of the program, the IRS will generally stop any collection efforts.
8. Can I use the Fresh Start Program if I am already on an installment agreement?
Yes, you may be able to modify your existing installment agreement to take advantage of the Fresh Start Program’s terms.
In conclusion, the Fresh Start Program for Taxes is a helpful initiative that provides taxpayers with various options to resolve their tax debts and make payments more manageable. It is essential to consult with a tax professional or contact the IRS directly to determine eligibility and understand the specific terms and conditions of the program.