The Internal Revenue Service (IRS) is one of the most important agencies that people deal with as soon as they start working. What some people may not know is that they’re not just about collecting taxes, and the misconception that they have no mercy or leniency is far off. There’s actually an IRS debt forgiveness program which was brought about by 2008’s major recession. It’s an initiative generally referred to with an umbrella term: the IRS Fresh Start program.
What goes into the Fresh Start program of the IRS?
In an effort to help people move forward, the IRS made a decision in 2011 to launch an initiative they referred to as a Fresh Start. It’s a program with a number of options for debt relief. This is so that taxpayers can have a less difficult time navigating tax debt and penalties through legal means. Depending on the option a taxpayer decides to go with, their debt can be either frozen or outright reduced. Some options allow for a more manageable payment plan, with the total amount broken down into set, reduced amounts over a certain timeframe. Depending on the particular present financial situation of the taxpayer, repayment and relief comes at several levels.
The initiative’s entire point is for taxpayers to be able to return to good standing. Instead of just using heavy penalties, it tends to favor repayment options that are within reason. Through this perfectly legal route, taxpayers can pay their taxes off without having to worry about wage garnishments, liens, levies, and even the possibility of being arrested. Taxpayers still need to file returns on time moving forward and, of course, remain within compliance. It’s beneficial to the IRS under the premise that something collected is better than nothing at all.
It’s somewhat complex overall, however, so the best way to figure out eligibility is with the help of a licensed tax professional. They can help with everything, including how to get the IRS on the phone if need be.
What makes the IRS Fresh Start beneficial?
- CNC (Currently Non Collectible): Under the initiative, taxpayers will have an easier time qualifying for the CNC status. This means that the IRS will acknowledge that the taxpayer has no disposable income which means they can’t make good on needed monthly payments to them. Monthly payments will be unnecessary and the taxpayer is protected from garnishment or levy as well.
- IA (Installment Agreement): Through the Fresh Start, there will be more available avenues for a monthly payment plan that the taxpayer can actually afford to make good on to be created.
- OIC (Offer In Compromise): Taxpayers who make use of the IRS Fresh Start will find it more convenient to settle a part of their total tax debt balance.
- Penalty Abatement: More ways for penalties to be reduced become available to taxpayers through the initiative.
The IRS Fresh Start is an initiative that was started by the IRS to help taxpayers after the recession. It seeks to allow for the repayment or relief of debt. It has multiple benefits, including the installment agreement, penalty abatement, and qualifying for currently non collectible status.
Need to know more about the Fresh Start initiative? Reach out to Axiom Tax Resolution Group today! We are tax professionals ready to find a permanent solution to your tax problems with the IRS.