IRS Fresh Start Relief Program Tax Debt Assistance

IRS Fresh Start Relief Program

This program was first introduced in 2011 by the United States Federal Government. The purpose of the IRS Fresh Start Program initiated by the IRS is to help taxpayers manage their outstanding tax debts. The main goal of the IRS Fresh Start program is to combat predatory collection practices such as financial penalties and tax liens, which are used by the Federal Government to punish individuals who owe back taxes that they have not yet paid.   

The IRS has doubled the limits for filing a notice of federal tax lien for the IRS. The IRS Fresh Start Initiative allows for a great way to get rid of tax debt while avoiding a tax lien or levy.

Key Points:

The IRS Fresh Start program is a set of initiatives put in place by the Internal Revenue Service (IRS) to assist taxpayers who are struggling to pay their taxes.

The program includes a variety of measures such as increasing the amount that can be paid through an installment agreement, expanding the eligibility criteria for the Offer in Companies (OIC) program, and providing more leniency for taxpayers who are unable to pay their taxes due to economic hardship.

To qualify for the ISP Fresh Start program, you must provide complete financial documents and stay up-to-date on all tax filings.

Facts and Statistics of the IRS Fresh Start Relief Program

  • The IRS Fresh Start initiative was created in 2012 due to the economic downturn.
  • The Internal Revenue Service accepted more than 600,000 of the 1.3 million offers of settlement requests.
  • The average amount saved by taxpayers offered in the settlement was $6000.
  • Taxpayers settled an average of 57% less than the amount actually owed.
  • The Internal Revenue Service has provided payment plans to more than 3 million taxpayers through the Fresh Start program.
  • This program has helped more than 10 million taxpayers since its inception.
  • Taxpayers have been allowed to repay their tax debt in monthly installments for up to 72 months.

What Are the Benefits of the IRS Fresh Start Relief Program?

The IRS Fresh Start program significantly reduces any total amount owed. This money can be life-changing by allowing taxpayers to get back on track financially and achieve financial freedom from the IRS.

Here are some benefits of this program are as follows:

  • This program reduces tax debt by up to 90%.
  • Relieve any financial obligation to the IRS.
  • Allows for installment agreements on unpaid taxes.
  • Lower Penalties & Interest
  • Avoiding a federal tax lien.
  • Avoiding unauthorized garnishment.
  • Expands the ability for taxpayers to settle taxes for less through Offers in Compromise.
  • Helps taxpayers get back into compliance with filing and payment obligations.
  • Finally getting your life back on track.

How Does The IRS Fresh Start Relief Program Work?

A taxpayer owes the IRS $15,000 due to compound interests and penalties in addition to years of back taxes. The taxpayer may also be out of work and barely able to afford utilities and living expenses. They have no means to pay the IRS $15,000. And they will never have the means to repay the IRS the money they owe.

The Fresh Start program mandates that the IRS not collect more money from taxpayers. It helps taxpayers reach an agreement with the IRS. And allows the taxpayers to pay the amount they can easily afford.

The IRS’s primary criteria for assessment is the taxpayer’s financial status. It gives taxpayers the option to repay their loan over six years through an installment agreement.

The taxpayer has to fill out a form on the IRS website. Calling or emailing an IRS representative is also possible. When they submit an application and it is received and processed by the IRS, they find out if they are eligible for IRS Fresh Start Relief Program or not. After approval, the taxpayer will know what their new payment amount will be.

The Four Options for the IRS Fresh Start Relief Program

The IRS Fresh Start Relief program is a program designed to help taxpayers who are struggling to pay their taxes. The program offers four options for taxpayers to choose from:

  • Installment agreement: Taxpayers can make monthly payments to the IRS to pay off their tax debt over time. The payment goes directly to the taxpayer’s total tax debt and continues until the debt is paid in full. The downside is that the IRS Fresh Start Relief Program will continue to apply interest on your total debt, even if that amount is required to pay monthly changes under your Fresh Start program. With the IRS’s ability to add interest to your remaining account balance, you may end up paying more than the principal amount.
  • Offer in Compromise (OIC): Taxpayers can make a lump-sum payment or a series of payments to the IRS in order to settle their tax debt for less than the full amount owed. Qualifying for the OIC program is your best-case scenario for tax refunds. Because you can reduce your debt and make your financial situation easier.
  • Currently Not Collectible (CNC): CNC status is a program offered by the IRS to individuals who are unable to pay their tax debt. When a taxpayer is placed in CNC status, the IRS temporarily suspends collection efforts and the taxpayer is not required to make payments on the debt. However, interest and penalties will continue to accrue on the outstanding debt. Taxpayers may apply for CNC status by submitting a financial statement to the IRS. This status can be a viable option for taxpayers who are experiencing financial hardship and cannot afford to make payments on their tax debt. It is important to note that while the IRS Fresh Start Relief Program will not actively pursue collection efforts during this period, taxes owed will still need to be paid in the future.
  • Penalty Abatement: If you have IRS penalties, there is a chance you may be eligible for IRS penalty relief. When a taxpayer fails to file their taxes or fails to pay their taxes, they continue to accrue penalties that add to the debt they have to repay. As another form of tax relief, the latest Fresh Start program offer is also known as “Penalty Abatement”. If the IRS determines that you meet a strict set of requirements, they can waive up to $100 in tax bill penalties.

How to Apply For the IRS Fresh Start Relief Program?

IRS will not accept tax exemption applications through any program in Fresh Start Initiative without any proof. Include as much evidence as possible while sending the application. Documentation is the best form of evidence against eligibility for the strict IRS Fresh Start Relief Program.

The documents you need include:

  • Doctor/medical statements
  • Fire department reports
  • Insurance claims
  • Student loan statements
  • Death certificates of family members

And include a letter with your Form 843 explaining you’re personal situation and why you are unable to pay your outstanding tax debt.

You must file all your missing or unfiled tax returns to meet the additional requirements to get tax relief through the Fresh Start program. Your estimated tax payments must be available and your current deductions must be correct. Finally, all filings for the last 6 months must be present or valid.

The best way to prevent your application from being rejected is to contact a professional tax relief company. If you are denied by the IRS Fresh Start Relief Program, tax relief companies can help you file an appeal letter.

IRS Fresh Start Relief Program Qualification   

Tax relief through the Federal Fresh Start Program is possible only for those who are eligible for it. To qualify for the IRS Fresh Start Initiative, you must prove that paying your tax balance will cause significant financial hardship.

The severity of your financial difficulties determines which Fresh Start Tax program is available to you. The IRS has guidelines for what constitutes financial hardship. But the entire responsibility of proving the hardship falls on you, the taxpayer, or the tax relief company hired to represent you.

Some FAQs of the IRS Fresh Start Relief Program

Is The IRS Fresh Start Program Legit?

The Fresh Start Program is a financial initiative that promises to help individuals improve their credit scores. While it may be legitimate, it is important to thoroughly research the program and read reviews before committing to it. It is also important to remember that no program can guarantee a specific credit score outcome.

Is the IRS Fresh Start program new?

The IRS Fresh Start Relief Program is not new. It was first introduced in 2011 as a way to help taxpayers struggling with tax debt. The program offers several options for taxpayers to pay their debt, such as installment agreements, offers in companies, and more. Since its inception, the IRS has helped more than 1.7 million people settle their tax debts.

How Much Does the IRS Fresh Start Program Cost?

The program is free to use and there are no fees associated with it. Taxpayers may be required to pay any outstanding taxes, penalties, and interest that they owe. Taxpayers may be required to set up a payment plan with the IRS in order to pay their taxes over time. If your goal is to reduce the amount owed, an offer in compromise is a great option.

What is the timeline of the program?

A suitable timeline for a Fresh Start program is usually 6 to 12 months. However, there are certain cases that result in a longer timeline.

Tax Debt Assistance

Tax debt can be overwhelming, but there are options for assistance. One way to get help is through a payment plan with the IRS Fresh Start Relief Program. This allows taxpayers to make monthly payments towards their debt instead of paying the full amount upfront. Another option is to apply for an Offer in Compromise, which is a settlement agreement between the taxpayer and the IRS where the taxpayer agrees to pay a reduced amount of the debt. Additionally, some taxpayers may qualify for hardship status, which temporarily delays collection action by the IRS Fresh Start Relief Program.

It’s important to note that these options are not automatic, and taxpayers will need to provide financial documentation to the IRS to qualify. It’s also important to consult a tax professional to understand the qualifications and the process for these options.

In summary, if you are facing tax debt, there are options available for assistance such as payment plan, Offer in Compromise, and hardship status. However, it’s important to consult a tax professional and provide financial documentation to the IRS Fresh Start Relief Program to qualify for these options.

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