IRS Fresh Start Program Check You Are Eligible to Get Tax Debt Relief or Not!

IRS Fresh Start Program is an initiative introduced by the Internal Revenue Service (IRS) to assist individuals with tax debt. Its primary goal is to provide a viable solution for paying off tax obligations, thereby helping people avoid significant trouble. This program is specifically designed for U.S. citizens whose annual income is $70,000 or less. In such cases, individuals are required to pay a 14% tax rate. Failure to meet the payment deadline results in substantial penalties and high interest rates.

IRS Fresh Start Program Check you are eligible to get tax debt relief or not!

The IRS Fresh Start Program acknowledges that tax debt burdens primarily affect the lower and middle class. With the intention of relieving this burden, the program was launched in 2011. It allows individuals to repay their tax debt over an extended period rather than in one lump sum, providing a more manageable approach to getting out of tax debt.

The program consists of five key components:

1. Offer in Compromise (OIC): Enables individuals to significantly reduce the amount of tax debt they owe by reaching a compromise with the IRS.
2. Installment Agreements (IA): Allows individuals with tax debt up to $50,000 to make monthly payments over a period of six years, exempt from interest and penalties. It also safeguards against tax liens, wage garnishments, and asset seizure.
3. Currently Non-Collectible: Offers relief to individuals who are currently unable to pay their tax debt due to financial hardship. During this period, the IRS temporarily suspends collection activities.
4. Penalty Abatement: Provides an opportunity for individuals to have penalties associated with their tax debt reduced or eliminated.
5. Innocent Spouse Relief: Protects individuals from being held responsible for their spouse’s tax debt under certain circumstances.

Each of these programs has different eligibility requirements. It is important to note that anyone who owes tax debt may be eligible for the benefits offered by the IRS Fresh Start Program. To determine eligibility, individuals should consult with the appropriate officials or refer to the necessary qualifications outlined below.

To qualify for tax relief through the IRS Fresh Start Program, you must meet the following criteria:

1. If you are self-employed, your annual income must have decreased by at least 25%.
2. For single individuals, your annual income should be less than $100,000.
3. For married couples, the combined annual income should be less than $200,000.
4. The amount of tax debt owed must be less than $50,000.

Typically, individuals who qualify for the IRS Fresh Start Program are given a maximum of five years to repay their tax debt. This timeframe helps individuals avoid incurring additional penalties and interest rates.

The benefits provided by each of the five programs under the IRS Fresh Start Program may differ. The Offer in Compromise (OIC) and Installment Agreements (IA) are the most commonly utilized programs for tax debt relief. Detailed information about these programs can be found below.

Offer in Compromise (OIC)

Offer in Compromise (OIC): The OIC program allows taxpayers to significantly reduce their tax debt amount based on their current financial circumstances. Some individuals have received up to 90% exemption on their tax debts through this program. To pursue tax debt relief using OIC, it is advisable to hire a tax professional who can effectively present your financial condition in the necessary forms, potentially resulting in a 90% reduction of your tax debt.

Installment Agreements (IA)

Installment Agreements (IA): The IA program is the most frequently employed option within the IRS Fresh Start Program. It permits individuals with tax debt up to $50,000 to make payments over a span of six years, free from interest and penalties. This program also eliminates the risk of tax liens, wage garnishments, and asset seizure. It requires monthly deposits of a fixed amount over the six-year period.

If you have tax debt totaling up to $50,000 and are unable to make a lump sum payment, the Installment Agreements (IA) program under the IRS Fresh Start Program is recommended. This option will save you from accruing excessive interest and penalties, providing relief without the fear of asset confiscation.