Fast Facts: The IRS Fresh Start Program

Don’t you wish you could hit the “reset” button on your unpaid taxes? If you could just go back to when they were first due and avoid all those expensive fees, penalties and interest, wouldn’t life be so much easier?

With the IRS Fresh Start Program, you can do just that and more! Read on to find out more about this debtor-friendly program and don’t forget to schedule your consultation with the legal team at the Law Offices of Robert V. Boeshaar to receive experienced help with all of your tax-related legal needs.

What it is:
The IRS Fresh Start Program is a program designed to give taxpayers repayment options when they owe a substantial amount of tax debt. It also provides for penalty relief in some circumstances. The repayment options—extended installment agreement, offer in compromise, and tax lien withdrawal—make repaying tax debt more manageable and often save the taxpayer money by preventing the accumulation of interest, penalties, and fees. Enrolling in the program can also prevent aggressive collections actions like wage garnishments and seizure of assets and, in some cases, protect your credit score.

Who qualifies:
While the IRS Fresh Start Program makes tax repayment easier for many taxpayers, it isn’t available to everyone. The IRS Fresh Start Program provides for Penalty Relief: the failure-to-pay penalty may be waived for six months if the following criteria are met:

• You are self-employed and suffered a 25% or greater drop in your net income or you were unemployed for at least 30 consecutive days from the start of the tax year through April 15 of the next year;
• Your total tax debt is less than $50,000;
• You are single and your earnings are less than $100,000 per year or you and your spouse are filing jointly, and your combined earnings are less than $200,000 per year; and
• You file Form 1127 Application for Extension of Time for Payment of Income Tax Due to Undue Hardship, by the due date of your tax return (without extensions).

The IRS Fresh Start Program provides for payment plans for income taxes in the following circumstances:
• All past tax returns have been filed;
• You agree to file all future returns on time;
• You owe less than $250,000 (this cap was recently increased – it had been $100,000);
• With the Fresh Start Program, payments can be made over 72 months if you owe less than $100,000 and over 84 months if you owe more than $100,000.
If you qualify for a streamlined installment agreement, you can either apply for the program online or by submitting Form 9465.

Repayment details:
The IRS gives you three options for repayment:
Extended installment agreement: (most common) you can make monthly payments over the course of six years and the payment amount is based on what you can afford
Offer in compromise: this is when the taxpayer makes the IRS an offer to pay a lesser amount than what is owed in exchange for the full debt being settled
Tax lien withdrawal: when you set up a direct debit repayment plan and pay the amount owed to less than $25,000, you can request in writing that the tax lien be withdrawn from your accounts

Unsure about which type of payment is right for you? A qualified tax attorney can help you pick the best option.

Contact us today to schedule an initial consultation.

At the Law Offices of Robert V. Boeshaar, we know that having unpaid taxes can be a stressful and expensive burden. That’s why we encourage our clients to schedule a consultation to help them get back on track with the IRS Fresh Start Program and other services. To get started today, schedule an initial consultation with us online.

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