Are you grappling with paying federal tax debt?
If so, you may have come across the IRS Fresh Start Program (or People-First Initiative) in your research and are wondering if this initiative can solve your problems.
What is the IRS Fresh Start Program, and can it help you settle your debt? The answers to these questions depend on you and your financial circumstances.
The first step to understanding how the IRS Fresh Start initiative may be able to help you is learning what it is and how you can qualify. Keep reading to learn more about this tax forgiveness program.
The IRS Fresh Start program can help individual taxpayers and small businesses who are struggling to pay federal taxes.
The program was established in its original form in 2011, but the IRS has expanded it by utilizing more adaptable Offer-in-Compromise terms.
Now, some of the most financially distressed taxpayers will have the opportunity to clear up their tax debt, perhaps more quickly than before.
An Offer in Compromise (OIC) is an agreement between the IRS and a taxpayer that settles the taxpayer's indebtedness for a lower amount than what is owed.
The IRS won't just accept any OIC. The IRS looks at the taxpayer's assets and income to decide on their collection potential. They will assess whether the taxpayer can pay in full as a lump sum or by another payment arrangement. These agreements are subject to the acceptance of legal requirements.
The IRS has implemented changes to the Fresh Start Program to address the many taxpayers who are struggling to pay their bills. The Fresh Start Program expansion focuses on financial analysis.
The changes also enable some taxpayers to resolve tax debt in as little as two years. This change is significant, as the taxpayers enrolled in the original program were faced with repayment terms over four to five years.
The Fresh Start Program was implemented to give taxpayers struggling with first-time tax debt another chance. The original program initiatives include:
A year later, in 2012, the IRS added to the Fresh Start Initiative. It became available to more taxpayers as the following revisions were implemented:
These changes implemented real-life situations into a program previously entirely based on specific formulas.
The IRS now considers the things that typically cause people to fall behind on taxes—living expenses, local tax debts, student loans—in their determinations.
You can qualify for the IRS Fresh Start Program if you can accept paying your tax debt over time through an installment agreement. You must meet the following parameters to benefit from the program:
If you qualify for the program, other bonus items may also apply:
Businesses are also able to participate in the IRS Fresh Start Initiative. You're eligible when:
As a bonus for qualifying, your business may be eligible for the abatement of particular penalities.
To apply for this program, you must follow all guidelines established by the IRS. First, you must file all of your tax returns—back and current.
If you have outstanding tax returns that you haven't filed, you can't request any of these repayment options. Once enrolled in the People-First Initiative, you also must elect to file all of your future tax returns on time.
When you have filed all of your tax returns, you can visit IRS.gov to enroll in the Fresh Start Initiative using the Online Payment Agreement tool. If you prefer to enroll by mail, you can access and file a Form 9465.
Enrolling in the program can be a complex undertaking. If you become overwhelmed and don't understand the process, you may not see through to the end.
To ensure that you've enrolled successfully, you should hire a tax lawyer at GetATaxLawyer.com to assist you in the process. We can help you disclose all of the requested information and avoid disclosing anything that may be used against you in an audit or criminal investigation.
Your tax professional will advise you on the best repayment option to apply for based on your situation.
So, what is the IRS Fresh Start Program? It's an option you should explore if you or your business is struggling to find tax relief.
You can avoid owing more back taxes and settle your tax balance more affordably when you enroll in tax relief programs like the People-First Initiative. However, specific parameters are surrounding the initiative, which is when our tax attorneys step in. We help guide you in the right direction with our knowledge of tax law and experience so that you can find financial freedom with the IRS.