How to Get a Fresh Start With the IRS

If you have tax debt that still needs to be paid and you want to avoid a tax lien and bank levy, don’t panic – you have options.

One of the best resources you have at your disposal is all thanks to the IRS: the IRS Fresh Start Initiative. While originally initiated in 2011, the IRS is considering further improvements to the program that will make it even easier to manage tax debt and avoid harsh tax liens and levies.

RECENT FRESH START CHANGES (AND HOW YOU QUALIFY)

There are several aspects of the Fresh Start Initiative (also known as the IRS Fresh Start Program) that all taxpayers should be aware of. Here is a list of the highlights broken down into subsections:

TAX LIENS

• Previously, the threshold for the IRS to file a Notice of Federal Tax Lien was $5,000. Now the threshold is $10,000.
• Tax lien withdrawals are also now easier. It’s now much simpler to meet the qualifications for publicly eliminating your Notice of Federal Tax Lien. In order to get a tax lien withdrawn, you would have to pay off a lien within the statute of limitations (be in filing compliance for three consecutive years prior and be in compliance of estimated tax payments if self-employed), set up a 60-month direct debit installment agreement, have a balance that is below $25,000, make three successful payments on an installment agreement that is converted to a DDIA.

INSTALLMENT AGREEMENTS

• If you, as an individual taxpayer, owe up to $50,000 to the IRS, you can pay through a DDIA for up to six years. This limit used to be $25,000, so it has now been doubled.
• For small businesses, this limit has been changed from $10,000 to $25,000. Businesses can also pay down debts over $25,000 in order to be DDIA qualified.

OFFER IN COMPROMISE (OIC)

• For those unfamiliar with an OIC, “offer in compromise” refers to settling a tax debt for less than the actual amount owed. Through the Fresh Start Program, this program is now much speedier and more streamlined. If you want to go with a lump sum OIC, the IRS now only needs one year of future income as compared to the previous four. For short-term periodic OICs, they only need two years of income as compared to five.
• Additional expenses are now allowed by the IRS when they conduct their OIC review and calculation. For example, permitted expenses such as state tax debts and student loans are included in the expansion

HOW DOES THIS HELP YOU?

Living with IRS tax debt is stressful, and any possible resource to help alleviate such debt is good news. The IRS is more willing than ever to work with individuals who owe back taxes in order to help settle accounts and receive at least some money in order to clear the debt.

To ensure all of the nuances of the IRS Fresh Start Initiative are understood, taxpayers should always seek out the assistance of a licensed tax relief professional. With the help of an expert, you can discover the optimal way to minimize your tax debt and settle your account with the IRS.

Landmark Tax Group is a professional tax resolution firm that specializes exclusively in IRS and State back tax issues. Not only are we licensed Tax Relief Specialists, we are also former Senior IRS Agents who now serve the best interests of taxpayers like you – all we do is handle IRS and State Tax Relief matters, all day, every day.