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Is The IRS Fresh Start Program For Real?

The IRS has a way to help tax payers who get behind. This is called the Fresh Start Program. This program helps both individuals and businesses create a plan to settle their back taxes and move forward. The program can help a payer avoid tax liens and seizures that make it difficult for the payer to continue to live or conduct business.

Is The IRS Fresh Start Program For Real?

Development of the program

The U.S. government began the Fresh Start program in 2008. Changes in 2012 make it even easier for taxpayers to settle old debts. For example, if the payer faces a period of unemployment, they might qualify for penalty waivers. Payers can also qualify for extensions without penalty. Users can take advantage of installment agreements and compromise programs. It's important to work with a team of skilled and experienced attorneys in order to help you choose the best option in your case.

Installment agreement

If you owe back taxes, you may be able to arrangement for a payment plan. This is called an installment agreement. You can pay monthly amounts instead of worrying about the IRS trying to seize assets all at once as payment. In addition to having more time to pay, it can lower the total amount that the payer owes to the IRS.

While it's up to the IRS to decide on an installment amount, an attorney can help you negotiate for the best possible arrangement. It's important that you work carefully to create an installment agreement that works for you, because a default on an installment agreement can be very problematic. The IRS can revoke your agreement and try to collect the funds immediately.

A payment plan takes your living expenses into account, and the IRS wants to see you make an honest effort to pay. There are fees associated with an installment agreement. If you're going to work towards an installment agreement, it's important to work with a skilled and experienced attorney who can help you make sure that you complete the proper forms. The paperwork varies depending on how much you owe, whether you're a business or an individual and whether or not you have employees.

How can I compromise?

In addition to an installment agreement, the IRS has a program called an Offer in Compromise. If you're not able to pay the full amount because it's just too much, you can ask the IRS to consider allowing you to pay less than the full amount. You need to show that paying off the debt in its entirety is a hardship.

To take advantage of an Offer in Compromise, the IRS must look at your case to determine if they'll likely get more from the compromise than they'll get from simply trying to collect the debt. This is sort of like the saying that a bird in the hand is worth two in the bush. If the IRS thinks they'll get more money faster by allowing you to compromise than they'll get by trying to collect from you in traditional ways, they might agree to the compromise.

An IRS compromise is rare, and if you'd like to take advantage of a compromise, a skilled and experienced tax attorney can help you carefully negotiate with the IRS. They'll look at your tax debt and your current and future income. They'll look at their chances of collecting the debt immediately using traditional, forced collections. They'll consider your assets and the statute of limitations for collections. You can also expect the IRS to reexamine the amounts you owe to make sure that they're correct.

Filing your taxes

Regardless of your situation, it's important to file your taxes. You don't want extra penalties for failing to file. Filing taxes even if you can't pay them helps show the IRS that you're working in good faith. An Offer in Compromise is also more likely to succeed when you're not in bankruptcy proceedings. Expect the IRS to ask lots of questions about your current financial situation.

Payroll taxes

Although Fresh Start and Offer in Compromise may be available in some business tax debt cases, the IRS is usually quite strict about overdue payroll taxes. That's because the IRS views it as theft. They say that because payroll tax debt is the employee's money, a business shouldn't have any problem turning it over to the IRS on time. The IRS says that employees trust their employers to take care of submitting payroll taxes.

If you're facing overdue payroll taxes, expect the IRS to be very aggressive when they try to collect these payments. The IRS can aggressively file federal tax liens that may prevent you from paying other lenders and otherwise conducting business. If you're facing a payroll tax debt, you should know that it's more serious than other types of tax debt. Whatever tax situation you're facing, it's important to work with a skilled and experienced tax attorney to help you address the matter and work to reach the best possible solution.

Mary King
Attorney Mary King

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