Do You Qualify for the IRS Fresh Start Program?
by Michael Murray, North Carolina Tax Attorney
The Internal Revenue Service (IRS) works hard to collect back taxes from many Americans each year. The caseload can be overwhelming and get seriously backlogged. In order to help taxpayers get back on track, they established the ‘Fresh Start’ program or ‘Fresh Start Initiative’.
Essentially, the program helps both individuals and small businesses who are attempting to settle an overdue tax liability by reworking its own collection policies. The program’s goal is to make it easier for taxpayers to pay their outstanding balances and avoid tax liens, garnishments and levies.
The two main strategies offered under the IRS Fresh Start are known as
The Installment Agreement allows taxpayers who cannot pay off their debt in full to enter into a monthly payment plan with the IRS. The IRS determines the amount owed each month, but an experienced tax controversy attorney is crucial to have in your corner during the negotiation phase.
Once the installment agreement is in place, it is important to never miss a payment.
Offer in Compromise
For taxpayers who find themselves in an insurmountable amount of debt, even an installment agreement may be a hardship. In this situation, an experienced tax controversy attorney can help you with a settlement option under the IRS Fresh Start Initiative called an Offer in Compromise.
This IRS must determine that based on your financial circumstances that the total amount owed would create a hardship and therefore, the IRS may be willing to reassess the total amount owed.
To qualify for an Offer in Compromise, the IRS will consider the following factors:
- The IRS will weigh out whether they can collect more from you in forced collections or via an Offer in Compromise.
- The IRS determines that there is a possibility that the amount owed is not correct. Any potential discrepancy in amount owed opens the door to OIC negotiations.
- Undue financial hardship may be proven to cause the IRS to consider OIC.
Receiving approval for an Offer in Compromise can be a lengthy process. It’s important to work with an experienced tax controversy attorney.
For more information on whether you qualify for either of the settlement options under the IRS Fresh Start program, please contact the North Carolina tax attorneys at Murray Moyer, PLLC.