What Is The IRS Fresh Start Program?
The Fresh Start Program is not a single resolution strategy, like an Installment Agreement or Offer-in-Compromise. Rather, it’s a series of changes implemented by the IRS to provide back taxes help for taxpayers.
The Fresh Start Program began in response to the economic challenges in response to the late 2000s financial crisis. It aims to provide tax relief for individuals and families struggling with tax related debt. The program helps taxpayers by giving tools like tax liens, penalties, payment plans, and offers to settle debts for less.
How Does the IRS Fresh Start Program Work?
Understanding the program’s changes may be difficult for people who don’t know much about taxes. Fortunately, the team at Boxelder Consulting is here to help.
We can assist you in taking advantage of the Fresh Start tax relief program. We will simplify the process for you and recommend the most effective tax strategies.
The Fresh Start Program has made four significant changes to IRS policy. These changes provide opportunities for assistance with back taxes. Taking advantage of these changes can be beneficial for you.
1. Tax Lien Threshold Increased To Favor Taxpayers
The Fresh Start Program improves conditions for taxpayers by raising the threshold for IRS tax liens from $5,000 to $10,000. This gives taxpayers extra time to pay. However, the IRS can still take money from your paycheck, which can happen before you owe $10,000.
In addition to a higher threshold, the IRS has also offered greater access to lien relief. Taxpayers can request the removal of liens once they pay the taxes in full. In some cases, taxpayers may be eligible for lien relief when they’ve made progress toward full payment. The IRS has also improved the turnaround time for review of lien relief requests.
To recap:
- The Fresh Start Initiative increased the tax lien threshold from $5,000 to $10,000, and
- It expands access to tax lien relief.
2. Greater Access to Tax Penalty Relief & Forgiveness
The IRS can impose fines for various reasons. These include not paying taxes on time, not filing taxes on time, or not filing taxes at all. Taxpayers may face penalties of up to 40% of the amount owed.
These penalties can create difficulties for taxpayers who are attempting to repay their tax debt. However, through the Fresh Start tax relief program, taxpayers now have more access to forgiveness for these penalties.
To recap:
- The IRS Fresh Start Program provides relief from some tax penalties.
- However, the IRS can still initiate other collection actions prior to a debt of $10,000
3. Easier Access to IRS Streamlined Installment Agreements
In many cases, taxpayers are not able to repay their entire tax debt in a single, lump-sum payment. The Fresh Start Program provides relief in these cases by providing easier access to installment agreements.
If a person or business owes $50,000 or less in taxes, they can qualify for a payment plan. This plan will enable them pay off their taxes easily. However, the timetable for the payment plan can not expand past 72 months, or six years.
To recap:
- The Fresh Start Program allows access to installment agreements for those who owe no more than $50,000
- The Installment agreement cannot last longer than 72 months.
4. Favorable Offers In Compromise From The IRS
The IRS Fresh Start program also makes changes to the offer-in-compromise (OIC) process. Now, the calculations used in the reasonable collection potential equation are more taxpayer-friendly. This means that more individuals can utilize the OIC program, and they can repay the tax debts it satisfies more quickly.
To recap:
- The Fresh Start tax program makes adjustments to reasonable collection potential calculations that increase access to OIC relief.
IRS Fresh Start Program FAQs
The Fresh Start tax program provides many benefits to taxpayers who need relief from their unpaid taxes. If you have back tax debt, you should contact the tax professionals at Boxelder Consulting for assistance. We can guide you through the details of the Fresh Start Program and help you pave the way toward a debt-free life.
Here are a few common questions on IRS Fresh Start that we hear from potential clients:
Does The IRS Have A Fresh Start Program?
Yes! The IRS began the Fresh Start Program in 2008. The program was designed to help taxpayers struggling with debt during the financial crisis. It offered improved relief options to help these taxpayers.
Since then, the IRS has continued to bolster the program. Boxelder’s tax attorneys have experience with IRS Fresh Start policies. They can assist clients with offers in compromise, payment plans, penalty forgiveness, and removing federal tax liens.
How Do I Apply For The IRS Fresh Start Program?
The IRS’s Fresh Start Program helps with taxes by offering compromises, payment plans, forgiving penalties, and removing tax liens. The program offers various options to help taxpayers manage their tax obligations. These options include compromising on the amount owed, setting up payment plans, forgiving penalties, and removing tax liens. Taxpayers can take advantage of these services to alleviate their tax burdens.
Each policy has its own set of qualifications. You should speak with a tax professional or use Boxelder’s tax relief resources. This will assist you in making an informed decision and ensuring that you pay your taxes in full.
What Are The Requirements for the IRS Fresh Start Program?
The IRS created the Fresh Start Program to be inclusive to a wide range of taxpayers. The program offers several different relief options, each with different requirements. For example, here are the basic requirements for penalty assistance through the Fresh Start Initiative:
- Self-employed (1099 filing) individuals must prove a drop of 25 percent in net income.
- Single filers can’t make more than $100,000 per year.
- Joint filers can’t make more than $200,000 per year.
- Your total liability must equal $50,000 or less.
If you don’t meet the requirements, the IRS still has many tax relief options for you. You can use the Fresh Start program or other tax relief initiatives. Boxelder’s experienced tax lawyers can help you navigate the best relief strategy for your specific situation.
Is The IRS Fresh Start Program Legitimate?
Yes! After the financial crisis of 2008, the IRS needed a way to provide relief to affected taxpayers. The Fresh Start Program is a legitimate path to tax relief while remaining in agreement with the IRS. We want to help you with your financial situation to ensure your taxes are paid in full.