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Guide to the IRS Fresh Start Initiative | Tax Relief Programs | Florida

Updated: Nov 11


FLAT FEE TAX RELIEF Coast to Coast Tax Relief Programs


If you’ve heard about the IRS Fresh Start program (#FreshStartInitiative) for tax debt relief, you may be wondering whether you qualify and what tax relief programs are available to you. The Fresh Start Initiative is very helpful in that the program makes it easier for some taxpayers to pay their back taxes or settle their tax bill and avoid bad consequences like tax liens, IRS levies, and wage garnishments.

However, there’s also a lot of misinformation and misunderstanding about an IRS Fresh Start. The program isn’t a magic wand that can wave away your tax problems. If you want to take advantage of the tax relief programs available under Fresh Start, you’ll need to understand all of your options and to be prepared for a process that’s rarely simple.


What Is the Fresh Start Program?

Fresh Start is a set of tax law changes the IRS created to help individual taxpayers and small businesses during the 2008 financial crisis. You may hear people call it the “Fresh Start Program” or the “Fresh Start Initiative.” Don’t let this confuse you — it’s the same thing. “Fresh Start program” is the more common name, but “initiative” might be more accurate since Fresh Start is a group of tax law updates, not a program you can enroll in.

Fresh Start implemented three major changes to our tax laws:

1. Raised the minimum tax debt for a federal tax lien from $5,000 to $10,000 and allowed more taxpayers to avoid liens or have their liens withdrawn

2. Raised the maximum tax debt for installment agreements from $25,000 to $50,000 and increased the maximum length of agreements from five years to six

3. Reduced the amount of tax debt required to settle with the IRS through the Offer in Compromise (OIC) program

In general, these changes have helped taxpayers. One report showed that in the years following the Fresh Start changes, federal tax liens went down from 488,378 to 195,009.


The IRS Fresh Start Initiative helps the IRS obtain their two (2) main goals. The first goal is to collect money. The amount isn't as important as putting "a collection" in their statistical column even if it's a $100 Offer in Compromise settlement. The second (2) goal is to close a file. The IRS wants cases closed so they can move on to the next file.

There are some tax resolution firms who put out irresponsible and misleading advertisements (mainly late night cable TV) related to Fresh Start. As a result, many taxpayers think the options available under Fresh Start will provide a cheap, easy fix for their tax problems, which is not always true.


Will I Qualify for an Offer in Compromise Under Fresh Start?

Out of all the Fresh Start changes, the updates to the IRS Offer in Compromise (OIC) program have made the biggest impact for the most taxpayers. But as we mentioned before, ads from tax firms have exaggerated the ease of qualifying for an OIC.


Per IRS statistics the agency usually receives approximately 80,000 Offer in Compromise submissions yearly. The IRS usually approves about 42% of the tax settlements submitted. Due to the COVID-19 virus, our tax professionals expect both of these numbers to increase dramatically.

An Offer in Compromise is a settlement agreement between you and the IRS. When you secure an OIC, the IRS will dramatically reduce the amount of tax debt that you will pay.

Being "eligible and qualified" for an Offer in Compromise is not all that difficult. For example, you probably aren’t eligible if you:

1. Have unfiled tax returns. You need the last six years of tax returns prepared and filed. Easily accomplished.

2. Can afford to pay their debt in full, make payments or have the assets to pay. If you are "loaded" the IRS isn't going to give you a walk. An Offer in Compromise is for taxpayers who can pay their everyday expenses and have nothing left after doing so.


Once the IRS determines you’re eligible, they will evaluate your financial situation to try and figure out your level of financial hardship and how likely they are to successfully collect on the full tax debt you owe. At this point, the IRS will consider factors such as your:

a. Income

b. Allowable Expenses

c. Age - If you are 21, the IRS will look less kindly on you than if you are older.

d. Level of Education - If you have a medical degree, the IRS will believe that you have the likelihood of earning a very good income before the Statute of Limitations runs out.

e. Assets - If you have rental properties, a 401K, an IRA or other assets that can be liquidated and applied to the tax bill, the IRS will insist you liquidate.

f. Collection statute expiration date (the amount of time the IRS has to legally collect on the taxes you owe).

You’ll have the best chance of receiving a successful Offer in Compromise if you work with an experienced tax resolution attorney.


FLAT FEE TAX RELIEF HAS A 96% OFFER IN COMPROMISE SUCCESS RATE.



The vast majority of our clients get their OIC on our first attempt. And if you’re not likely to succeed with an OIC, we’ll tell you the truth up front. Being up front and honest will keep you from wasting your money, valuable time, and explain your realistic options for tax resolution.



ARE YOU READY FOR A FRESH START?



What About Installment Agreements?

An extended installment agreement is another tax relief program to resolve your tax liability. Unlike an Offer in Compromise, an installment agreement won’t reduce the taxes you owe. but an agreement can help you avoid garnishments and enforcement/collections.

There are three main types of installment agreements:

Short-term payment plan: If you can pay your balance within 120 days, then a short-term plan is the best option. You can apply online or by phone, mail, or in-person with no setup fee, and you can make payments by check, money order, or card. You’ll have to pay fees for debit and credit payments, and penalties and interest will continue to add up until your balance is paid in full.

Long-term payment plan: If you can’t pay your balance within 120 days, then you’ll need a long-term payment plan. Different long-term payment options have different associated fees.

Restructure or reinstatement of an existing payment plan: For an $89 fee, you can update an existing plan. If you qualify as a low-income applicant, you can receive a $43 reimbursement of the fee.

Once you enter into an installment agreement, it’s extremely important to make your monthly payments on time. If you miss payments or pay late, the IRS will cancel your agreement and restart enforcement all over again. Aggressive collection efforts that stopped with the payment agreement will come back in force. The IRS may garnish your wages, place a lien on your property, or seize assets.

How Do I Apply for a Tax Relief Program Under the IRS Fresh Start Initiative?

Negotiating with the IRS to try and get an OIC or installment agreement isn’t a quick or simple process, and most people who deal with the IRS on their own won’t succeed. If you decide to negotiate an OIC or installment agreement without help from a tax professional, budget plenty of time for the project and prepare for stress and frustration.


THE NUMBER ONE REASON A TAXPAYER'S OFFER IN COMPROMISE FAILS IS BECAUSE THEY TRIED TO DO IT THEMSELVES.


This article is provided by the tax professionals at Flat Fee Tax Relief who have been providing valuable tax debt help at a very affordable fee. Our tams are strategically located in Clearwater, Florida, and San Diego, California. This allows our tax pros to be available from 8 A.M. Eastern to 6 P.M. Pacific. This is extremely valuable when stopping an IRS levy in one day.

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