IRS Offers a Fresh Start
Even the IRS knows people who owe tax debt deserve a “fresh start,” which is why the agency introduced the Fresh Start initiative for taxpayers and businesses. Throughout its lifetime, the program has been expanded to help taxpayers afford owed debt.
Installment Agreements and Offers in Compromise are the two main components of the Fresh Start program and are dependent on your unique situation. These repayment plans take off the weight of one, big debt amount and make it easier for taxpayers to face tax issues.
Installment Agreements: An installment agreement allows your debt payments to be spread over a set period. Qualifications are stringent and the terms of your agreement are determined by your filing history, how much you owe and what your budget allows you to pay each month.
Before accepting a repayment plan, ensure that you can commit to the defined terms by doing a thorough expense analysis. Missing a payment or paying late can invalidate your agreement, forcing you to start all over again (and it won’t be so “fresh”).
• 2017 threshold to request an installment agreement: $50,000
• Pay period maximum length: six years
Offer in Compromise
An Offer in Compromise (OIC), which allows you to settle your liability for less than the total amount owed, can help taxpayers who have an insurmountable debt.
It’s difficult to qualify for an OIC – you must prove the inability to afford the tax debt and provide a detailed account of your monthly income and expenses. On top of that, the approval time for an OIC can be up to two years. Learn the requirements for an Offer in Compromise before making such a request, or better yet, work with a tax debt resolution professional to handle the process for you.
Lean on Tax Debt Resolution Professionals for the Ultimate Fresh Start
The Fresh Start Initiative provides you with a variety of tax resolution options, many of which are extensive and difficult to navigate. The team at Tax Defense Network can see if you qualify for these programs, facilitate reporting and paperwork, and deal with the IRS on your behalf for the best resolution.