The IRS Fresh Start Program is a general term that refers to the various debt relief options available by the IRS. This program was created to help taxpayers get out of tax debt and penalties legally. You may be able to reduce or freeze your debt. Some options allow you to repay your debt in smaller amounts over a longer period. The Fresh Start Program is a collection that makes changes to the tax code. The program offers different levels of relief and repayment options depending on each applicant’s financial situation. In 2011, the IRS created the Fresh Start initiative to assist more taxpayers in getting back to good standing. This program encourages reasonable repayment options rather than imposing penalties. Yes, taxpayers can benefit from the program. They may be able to pay taxes while avoiding Levies and wage garnishments. The IRS can also benefit from the fact that it can collect “something”, instead of nothing, from taxpayers. Let’s take a look at Fresh Start.

• Offer in Compromise
• Installment Agreement (IA).
• Current Non-Collectible (CNC).
• Penalty abatement

To determine which option is best for you, it will take time to sit down with a tax professional. To determine if you are eligible for these relief options, the IRS will need detailed financial information. Things like active wage garnishments and bankruptcy could make things more complicated. Continue reading to find out if you are eligible for a fresh start at the IRS.

Am I eligible for the IRS Fresh Start Program?

First, the IRS designed its Fresh Start tax program so that it is available to everyone. Because there are so many options within the program, you will likely find at most one channel that is suitable for debt relief. You can still benefit from working with a tax professional to explore the options available to you, despite the complexity of the IRS Fresh Start program. Current tax returns are the one hurdle you’ll need to jump. Before you can be considered for the Fresh Start program, the IRS will require that you are fully current with all tax returns. The correct amount of withholdings must be made for the current tax year. This is an IRS way to ensure taxpayers are accountable. IRS Fresh Start Program Qualifications The IRS Fresh Start tax initiative offers generous and inclusive benefits. There are some requirements that you need to be aware of. These are the requirements to be qualified:

• self-employed Individuals must show a decrease of 25% in their net income.
• Joint filers cannot earn more than $200,000 per year.
• A single filer can’t make more than $100,000 per year.
• Your tax balance must be below $50,000 by the end of the year.

You must apply for the option that is best suited for you. The IRS will not automatically apply the Fresh Start program for your tax debt just simply because you are eligible. The IRS charges interest, penalties, and interest until the entire amount is paid. It’s important to apply for help or request assistance as soon as possible.

What is the Fresh Start Program?

Fresh Start IRS offers a way for you to pay off your debts and avoid paying penalties. To get started, you will need to provide the necessary documentation and forms to the IRS. The IRS will create a plan that includes either monthly payments or lump payments.

How to apply for the IRS Fresh Start Program?

Each relief option offered by the IRS is eligible for an eligibility form. These forms will need to be completed by you honestly and fully. A tax professional can help you to eliminate the stress and confusion that comes with the process. An expert can help you to make sure that you are following all guidelines and that your application is the right one.

What can Tax Group Center do to help?

Since 2011, the Tax Group Center team has helped people to take full advantage of the IRS Fresh Start program. We are therefore very familiar with all aspects of the program. If you have a problem with delinquent taxes, Tax Group Center can assist in many ways. We’ll first identify any potential penalties or interest charges you should be aware of between now and the time you are approved for a relief plan. Next, we will discuss your circumstances with you to determine which Fresh Start tax program option is best for you. To increase your chances of getting accepted, we’ll walk you through each step of the application process. Because we understand the language of IRS, we can help our clients with all aspects of the application process. Our team will help you navigate the tax process and ensure you comply after you have been accepted to the Fresh Start program. To avoid breaking your agreement, we can help you file your taxes on time. Call us today to find out how you can get substantial tax relief under the IRS Fresh Start program.

Individuals | Fresh Start Program

The IRS Fresh Start Program is available to individuals who are willing to repay their debts in installments using a direct payment arrangement. The IRS Fresh Start Program allows qualified individuals to pay their taxes in smaller amounts, over a longer period, and with fewer penalties. In determining how much you can repay, the IRS will consider your ability to pay, current income, expenses, and asset equity. Each option comes with a unique application, qualification, and procedure. All you have to do is meet the following requirements:

• You owe less than $50,000, or you owe more but can reduce your debts up to this amount before beginning the program.
• Your outstanding debt can be paid off in as little as 60 months.
• You have filed your tax return and it is up-to-date.
• This is your first time falling behind in payments to the IRS
• You agree to a direct installment agreement
• While you pay your installments, you will keep the installment agreement intact. You will also keep up with tax filings and not be in any further tax debt.
• You can file for OIC, and you will be able to pay the Fresh Start Initiative settlement amount in 12 months.

You may be eligible to have specific penalties reduced if you are a first-time borrower. You may be eligible to have your federal tax lien removed if your debts are less than $25,000, or you can reduce them to that amount before you start the program. The program offers three repayment options: the extended installment agreement, the tax lien withdrawal, and the compromise offer.

Fresh Start Program

You may also be eligible for the Fresh Start Program if your business is a business owner who owes taxes. These requirements will apply to you:

• Your company owes less than $25,000
• The full amount will be repayable within 34 months
• You are up-to-date with federal tax filings.
• This is the first time that your company has fallen behind in payments to the IRS
• A Form 433-A Collection Statement for Wage Earners or Self-Employed Individuals will also be required. The qualified business income deduction is a great way to lower your income taxes for many taxpayers who own small businesses.
• Our goal is to make payments affordable so that you can afford them without any financial burden.

We’ve only briefly covered the basics of this program. We are happy to answer any questions you may have, give you a definitive answer about eligibility, or help you apply for the Fresh Start Initiative. No matter what your situation, our friendly, qualified tax professionals can help you find the best way to move forward. Fresh Start is an IRS initiative that can help you if you are having trouble paying back taxes or are concerned about staying on top of your tax payments. The IRS Fresh Start program provides tax debt options that make it simpler and easier for individuals and small businesses to pay back their taxes. The program’s most popular features include the extended installment agreement, simplified and expanded Offer in Compromise (OIC), as well as two types of tax lien relief. Each one of these options to pay off your tax debt has its eligibility requirements. We’ll discuss them below.

The Extended Installment Agreement

The extended installment agreement is the most popular option under Fresh Start. This allows you to pay off your tax debt for up to six years. Based on your income and assets, the IRS will determine an affordable monthly payment amount. You don’t have to worry about additional penalties or interest if you take advantage of this opportunity. Your property. The IRS will suspend these activities while an installment agreement is in effect and current.

Extended installment agreements are available to taxpayers with back taxes of less than $50,000. If your debt exceeds this amount, you may be eligible for the extended installment agreement. You can still apply to an installment agreement if your outstanding balance is greater than $50,000 and you are unable or unwilling to pay it down to $50,000. However, the application process to obtain an installment agreement for amounts exceeding $50,000 is more complex. An IRS collections staff member will negotiate your agreement. They will also need detailed information about your assets and income. You must have filed all required federal tax returns, and paid all estimated payments to be eligible for an extended installment arrangement.

Compromise or Offer

The Offer in Compromise (OIC) is another option under Fresh Start. OIC is a way to settle tax debts for a lesser amount than you owe. OIC has been available for tax debtors since the beginning. However, the Fresh Start program gives the IRS more flexibility in determining who is eligible.

The IRS won’t accept an offer of compromise unless you can pay your tax debt completely, either by installment agreements or equity that could be used to satisfy the debt. You must have filed all required federal tax returns, and paid all estimated payments. All required federal tax deposits must also be submitted if you are self-employed or have employees. You must also not be involved in an open bankruptcy proceeding.

Applying for an offer of compromise is a complicated process that requires you to provide detailed information about your assets and income. The IRS requires you to complete Form 433A (OIC), Collection Information Statement For Wage Earners and Self Employed Individuals, or 433B (OIC), Collection Information Statement For Businesses. You must provide information about the assets and bank accounts, as well as brokerage and investment accounts, as well as other assets, such as cryptocurrency and collectibles. Also, your income, monthly expenses, and loan amounts must be reported. These are used to determine how much you can afford.

Select a payment option, and then submit your first payment along with your application. The IRS will apply your payment towards your tax debt regardless of whether they return your application due to unfiled federal taxes returns or unpaid estimated tax payments. You must continue making monthly payments until the IRS reviews your offer.

There are two types of tax lien relief

The Fresh Start initiative increased the threshold amount of tax debt for filing a tax lien notification from $5,000 to $10,000. This means that the IRS won’t generally issue a Notice Federal Tax Lien for tax debts below $10,000. Fresh Start’s second provision regarding tax liens allows you to enter into a Direct Deposit Installation Agreement (DDIA), which will stop the IRS from putting a lien onto your property. You must sign a 60-month-long direct installment agreement. After you have made three direct installment payments, the IRS will withdraw the Notice of Federal Tax Lien.

Your tax debt must be less than $25,000 to be eligible for DDIA. Except for a lien withdrawal that was caused by an incorrect NFTL filing, you cannot have any prior lien withdrawals. As with all other provisions, your tax filings must be current.

Fresh Start was created to ease some of the stress and complexity associated with paying back taxes. However, managing your tax debt alone can cause anxiety and confusion. That is why we are here for you. A tax professional will help you decide the best course of action for your situation. We can help you create an affordable payment plan, eliminate penalties, or even reduce your tax debt with an offer of compromise.

You can work with a professional to determine eligibility for Fresh Start. However, it doesn’t matter if you do so DIY. The most important thing to do is to respond to any IRS notices or letters immediately. You will be more stressed if you delay in responding to any IRS notices or letters. You can get the fresh start and financial freedom you desire by acting quickly to pay off your tax debt.

Individuals and businesses that have outstanding tax balances can be subject to severe penalties by the Internal Revenue Services. This could lead to the seizure or destruction of personal or company assets in some cases. This dilemma can lead to a financial crisis and a new type of business was created to assist tax-delinquent taxpayers. These entities are known as tax settlement companies. They claim that they can reduce or eliminate any owed taxes to the IRS. These firms claim they can reduce or eliminate the clients owes to the IRS. But is this true?

KEY TAKEAWAYS

• Firms that specialize in tax settlement claim to have access to a wide range of experts, including former IRS employees, who are available to help their clients.
• Tax settlement agencies make promises that are almost impossible to keep, as the IRS is not likely to accept any offer to lower the tax owed.
• It is often difficult to qualify for offers-in-compromise and can take several months.
• High fees are common for tax settlement firms.

What are Tax Settlement Firms?

You have probably seen these ads on TV. People in desperate need who owe the IRS tens to thousands of dollars and have no one to help. The tax settlement company steps in, leaving the client with amazing messages saying that their tax liability has been miraculously reduced to hundreds or even thousands of dollars. Clients feel elated and more than satisfied. However, this is television or radio, or social media. Reality doesn’t always work like that. The debt settlement industry is a good place to start if you are unsure about the tax settlement industry. Both work in a similar way to varying degrees. Many firms that specialize in tax settlements claim they have access to a wide range of tax experts who were former IRS employees. In reality, this may be a substantial misrepresentation — at least in some cases. While there might be a few employees who worked for the IRS, such as lawyers or a few people within the company, most likely the majority of employees have not. Many employees are minimum-wage customer support representatives.

How Does Tax Relief Work?

Many tax settlement companies promise to send experts to the IRS to negotiate for their clients. They can then persuade them to accept a smaller amount, often pennies on each dollar. This is almost impossible and the IRS rarely accepts a reduction in tax due. Uncle Sam may accept a repayment agreement for back taxes if there are:

• The taxpayer has to be in an extreme situation where the amount due would create an economic hardship or be unfair (this would need to be an exceptional situation).
• If the debtor cannot find any kind of work that will provide enough income to repay the amount, like if they are disabled or have long-term illnesses.
• To cover tax obligation 1, the person who owes taxes must have no assets that could be used to pay the required tax 1.

Everyone else’s best hope is to get an extension of time for their tax debts to be paid. This usually includes additional interest and penalties.

Compromise or Offer

To reduce clients’ tax bills, tax settlement firms use an IRS-accepted procedure called an offer to compromise. This agreement allows some taxpayers to settle tax debts with the IRS for a lower amount than they owe. To settle tax debts, the taxpayer must provide substantial information to IRS regarding their assets and future income. Also, offers in compromise can take up to several months to complete. Qualifying for one of these offers might be more difficult than for Medicaid. This avenue does not offer a spend-down strategy. The approval rate of offer-in-compromise applications is usually very low. Taxpayers must show that they can prove the amount owed to be reduced. Auditor’s reviews are not always final. Taxpayers who have been audited may be able to appeal and save thousands of dollars.IRS Form 656 states that an exceptional circumstance could lead to financial hardship. It would be something like “unplanned events” or special circumstances (e.g. serious illness) where paying more than the minimum amount may impair your ability provide for your family. “2

Price Tag for Tax Settlement Firm

Tax settlement companies often charge an initial fee of between $3,000 to $6,000 depending on the amount of the tax bill and the proposed settlement. The fee is non-refundable in most cases and often mirrors the amount the client has of cash available. This is usually the amount the company claims it will save clients on tax payments. The IRS Office of Professional Responsibility is concerned about questionable practices in tax debt resolution. You can submit problems to the IRS using Form 14157 Complaint: Tax Resolver. 3Clients complained to the Better Business Bureau and the Federal Trade Commission about the fact that not all of these firms produced the promised results or were a fraud. Many firms materially misrepresent the fees they charge clients. They may initially charge a lower fee but then come back for more after being involved in the process.

Rates of success for tax settlement firms

The IRS rejects all offers of compromises it receives every year, as we have stated. There are very few clients who receive satisfaction from tax settlement companies, and many of them are financially poor. Most potential settlement clients must work out payment plans with IRS to pay off their tax balances in a time frame that allows them to keep their assets and dignity. More information on payment plans can be found on the IRS Website.

Locating a legitimate tax relief firm

Potential customers should be aware of these warning signs if they are thinking about hiring a tax settlement company. A firm promising a dramatic reduction in taxes for a customer without first obtaining a thorough financial background is likely to be a fraud. A tax agent that doesn’t ask a client why they owe the IRS money isn’t doing the proper investigation. Reputable tax relief firms will ask for financial information from their customers before they give them a realistic estimate of what they can do at a fair fixed price. Prospective clients should look for a local firm that is well-established and has a strong presence in the area.

IRS Tax Settlement Warnings

Many taxpayers deal with the IRS because it is one of the most complex creditors. The IRS has the legal right to seize assets and take extreme collection measures. Many taxpayers who are in default find the agency more frightening than private creditors and credit card agencies. This fear is what tax preparation companies play on, promising professional assistance that will solve their problems. These companies may make misleading claims and require large upfront payments. Don’t fall for them. The IRS has previously warned the public about fraud firms, citing many problems here. The IRS offers many ways for you to collect what you owe. Publication 554, The IRS Collection Process provides a detailed description and description of both the Offer in Compromise and the collection process. This information can be compared to what a tax settlement company tells you to make sure you are given the correct information before deciding whether to retain them.

The bottom line

There are many risks involved in the tax settlement industry. It is better to have your tax or financial advisor refer you to a qualified and experienced tax attorney who can help with unpaid taxes. You should be ready to go through extensive financial analysis as well as a lengthy bureaucratic process. They should also be ready to hear the IRS say “no” at the end.

Do Tax Relief Companies Work?

It depends. The industry is full of scams and poor business practices. False promises and high fees are used to lure customers by disreputable businesses. Still, legitimate tax settlement firms do exist. These firms are upfront about whether or not you will benefit and they charge reasonable fees.

Are Tax Settlement Companies Worth It?

It all depends. While disreputable companies might charge hundreds to thousands of dollars, they may not provide the results you are looking for. Good companies, on the other hand, charge transparent, reasonable fees and have proven track records. A flat percentage of the amount owed by the IRS is charged by some companies, such as 10%. Some companies charge an hourly fee that can range from $275 to $1,000. Companies won’t accept clients with less than $10,000 tax debt.

What do Tax Settlement and Tax Relief include?

A consultation is usually the first step in the tax settlement process. A case manager will examine your tax debt and other financial details and then provide an estimate. If you decide to continue, the case manager will conduct an in-depth review of your taxes, create a plan of attack, and negotiate with IRS.SPONSOREDGet a professional to help you develop your financial strategy can be difficult to find a financial advisor. However, the right professional will help you develop a strategy that meets your retirement goals. Smart Asset’s tool is free and will match you with fiduciary advisors within 5 minutes. Get started today if you are ready to match with financial advisors that can help you reach your financial goals.

What are the various types of tax relief available?

There are many ways to get tax relief. There are many options for tax relief. To see the tax relief options available to you, click on the appropriate option for your situation.

• If you are up-to-date on your tax payments, you can get tax relief
• Get tax relief if your taxes are not up to date

If you are current on your tax payments, you can get tax relief

You may be eligible for tax deductions, tax credits, and tax exclusions if you have already paid your taxes. Depending on the eligibility of each one, these can reduce your taxable income and/or your actual tax bill.

Deductions in taxes

Tax deductions allow you to lower your total taxable income, and thus reduce the tax you owe. Tax deductions are available for various items.

• The interest you pay on your student loan or mortgage
• Property taxes are paid on your house or other properties
• Sales taxes
• Charitable donations
• Health insurance premiums
• For business or work-related expenses

All taxpayers are eligible for a standard tax deduction. This is a $12,400 deduction for a single filer and $24,800 for married couples filing jointly. These deductions cannot be claimed if you don’t have the itemized deductions. Here’s an example showing how the standard deduction works. Let’s suppose you earned $60,000 in the past year. You are eligible for the $12,400 deduction if you are a single individual. This reduces your taxable income by $60,000 to $48,000 ($60,000 to $12,000). You’d be in the 22% bracket so your income tax would be almost $2,500 ($13,000 vs. $10,000,560).

Tax credits

Tax credits work in a different way than tax deductions. These credits do not reduce your taxable income. Instead, they lower your actual tax bill — that is, the total amount you owe to the government for the current year. You can apply for the dependent credit of $2,000 per person if you have children. The $2,000 would be deducted from your final tax bill. The credit could reduce your annual tax bill by $2,000 if you owe $10,000. This is a significant amount of savings. Tax credits are available for:

• Being a parent to a child or another dependent
• Adopting a child during that tax year
• Being old or disabled
• School-related expenses
• Childcare costs
• Contributing to a retirement fund
• Solar energy systems: Installing

Tax exclusions

In that they can reduce your taxable income, tax exclusions work in the same way as deductions. Exclusions allow you to exclude a portion of your income from your taxable earnings. One example of this is company-sponsored health plans. These are often considered a “benefit” and a part of your salary as an employee. However, your employer’s costs do not count towards your taxable income. This is one of the most common tax exclusions. Some other tax exclusions are:

• Certain types of income earned abroad
• Disability payments
• Payments for relief from natural disasters
• Housing subsidies or rent

If you are behind in your tax payments, you can get tax relief

There are options for tax relief if you have not yet paid your taxes, owe back taxes from previous years, or have not yet paid them. You have two options: you can either repay your debts in full over time or settle your debts to pay less. Below are the current options.

Fresh Start Program

A fresh start is an IRS program for taxpayers who are behind on their taxes. You can make an Offer in Compromise to settle your debts for less than what you owe. These offers will be accepted by the IRS based on your income, assets, and household expenses. You have two choices for how you make your payments if you are approved. Either you can pay a lump sum upfront (at least 20%) and then make the balance payment within five months. Or, you can pay one payment along with your offer and make the remainder monthly for the next six to two years. Acceptance of offers in compromise is generally difficult. The IRS has a pre-qualifier tool that can help you determine if this option may be available in your particular case. Form 656B is required to apply.