We get contacted all the time by Taxpayers who are looking to take advantage of the IRS’ “Fresh Start Program.” Thanks to many national tax relief outfits, the “Fresh Start Program” has gained a reputation of being a quick and easy way to setting a tax debt for “pennies on the dollar.” While such settlement offers are possible to Taxpayers who qualify, it’s important to know what the IRS’ “Fresh Start Program” actually entails. Here’s a breakdown:
- The IRS created the Fresh Start Program/Fresh Start Initiative in 2011 to help Taxpayers who were struggling to pay their outstanding tax liabilities. It was created for “financially distressed Taxpayers” so that they could clear up their tax problems.
- An Offer in Compromise is one component of the Fresh Start Program/Fresh Start Initiative - the IRS expanded the Offer in Compromise program through Fresh Start. An Offer in Compromise (“OIC”) is a settlement that allows a Taxpayer to pay less than the full amount owed; to qualify, the Taxpayer must be able to show the IRS that they cannot pay the balance in full through a full payment, lump payments, or through an Installment Agreement. To request an IRS Offer in Compromise, you must complete IRS Forms 433-A OIC and 656 and accompany the request with supporting documentation regarding your income and assets
- Another Resolution Option offered through the IRS Fresh Start Program/Fresh Start Initiative is the IRS Streamlined Installment Agreement on balances below $50,000. Under this option, Taxpayers are able to set up a financial-free Installment Agreement (meaning you don’t have to disclose all assets, income, etc.) when the balance owed to the IRS when the balance is below $50,000 and can be paid over 72 months or within the amount of time the IRS legally has to collect the debt – whichever is shorter. Keep in mind that there is now also an “expanded” Streamlined Installment Agreement for balances below $250,000, but this was not offered until 2020
- There is some lien relief available through the Fresh Start Program/Fresh Start Initiative. If you owe below $50,000 and set up a Streamlined Installment Agreement before the IRS files a Notice of Federal Tax Lien against you, you can request one not be filed. Taxpayers can also request a Lien Withdrawal under the Fresh Start Program/Initiative, which is more than a release, it’s as if the lien was never filed.
Have questions or interested in exploring whether the Fresh Start Initiative could benefit you and your tax matters? Contact Bryson Law Firm, LLC today.
