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Is The IRS Fresh Start Program Legit?
It is beneficial for taxpayers to be weary of potential tax scams that claim to reduce their tax bill, but fortunately for those who meet the criteria and have a positive financial history with the IRS, the Fresh Start Program is a legitimate tax debt relief program.
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Key Takeaways:
- The IRS Fresh Start Program is a legitimate tax relief program that gives eligible taxpayers the opportunity to find a resolution to their tax problem when they have a clean history with the IRS but cannot afford to pay their tax balance.
- The four programs within the Fresh Start Initiative include installment agreements, offers in compromise, currently non-collectible status, and penalty abatement.
- The qualifications for the Fresh Start Program include being up to date with all tax filing and tax payments, having a tax debt below $50,000 for the year, and having an income below the threshold for their filing status.
Is The IRS Fresh Start Program Legit?
The IRS Fresh Start Program is a legitimate tax debt relief initiative that allows qualifying taxpayers to resolve their tax problems when they cannot afford to pay their tax liability.
This program was developed in 2011 and experienced updates in 2012, with the changes allowing more taxpayers to see the benefits of this tax debt relief program. Since the COVID 19 pandemic, the application rate for the Fresh Start Program has significantly increased, and since its initial establishment, millions of Americans have been granted a second chance through this tax relief initiative.
Programs Within The IRS Fresh Start Initiative
There are four main programs within the IRS Fresh Start Program that offer individuals options to help them manage their unpaid back taxes and resolve their tax issues.
Installment Agreements
An installment agreement is a tax-debt relief option that allows taxpayers to pay back their tax debt using a monthly payment plan. The benefit of paying their tax debt through direct debit payments is it allows taxpayers to reduce their tax liabilities in a manageable way where they can still afford their basic living expenses.
Offers in Compromise (OIC)
Taxpayers who are approved for an offer in compromise can settle their tax bill for lower than the amount that was initially owed if they submit a payment for the settlement amount in one lump sum.
Currently Non-Collectible (CNC) Status
Taxpayers who are approved to have their accounts listed as currently non-collectible are temporarily relieved from the responsibility of making tax payments while the status is on their account.
Also referred to as IRS financial hardship status, taxpayers in this situation are protected from all IRS tax collection methods, including tax liens, tax levies, and wage garnishments.
Penalty Abatement
If a taxpayer has a positive tax history with the IRS but has accrued several tax penalties due to late filing or underpayment of taxes, they may be eligible to have those penalties removed through penalty abatement.
Eligibility Requirements For The IRS Fresh Start Program
Taxpayers can check their eligibility for the IRS Fresh Start Program by filling out IRS Form 433, Collection Information Statement, a piece of documentation that asks questions about their financial information as a determination of their ability to pay taxes.
The qualifications for people to be eligible for the IRS Fresh Start Program include:
- Being up to date will all tax filings and previous tax payments
- Having an annual income below $100,00 if single
- Having an annual income below $200,000 if married
- Experiencing a drop in income by 25% if a sole proprietor
- Owing less than $50,000 in taxes at the end of the year
Our tax relief company has a team of experienced tax professionals that offer a variety of services, such as guiding clients through the process of applying for the IRS Fresh Start Tax Program, filing tax returns, negotiating with the IRS, and ultimately finding tax solutions that save them the most money. If you are ready to find a solution to your tax situation, call a tax professional now at Ideal Tax for a free initial consultation.