In April of 2013, the IRS introduced a new program to make it easier for taxpayers to pay back taxes and avoid tax liens. Individuals and small business taxpayers may benefit from the IRS Fresh Start program. There are three important features that you need to know.
First of all, you need to consider the tax liens. The Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien. That amount is now $10,000. However, in some cases the IRS may still file a lien notice on amounts less than $10,000.
When a taxpayer meets certain requirements and pays off their tax debt, the IRS may now withdraw a filed Notice of Federal Tax Lien. You must request this in writing using Form 12277, Application for Withdrawal. Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a direct debit installment agreement. You also need to request this in writing by using Form 12277.
If you default on a direct debit installment agreement, the IRS may file a new Notice of Federal Tax Lien and resume collection actions. Don’t ever miss a payment.
Next up are installment agreements. The Fresh Start program expanded access to streamlined installment agreements. Now if you owe up to $50,000, you can pay through monthly direct debit payments for up to six years. While the IRS generally will not need a financial statement, they may need some financial information from the taxpayer. The easiest way to apply for a payment plan is to use the online payment agreement tool at IRS.gov. If you don’t have web access, you may file Form 9465 to apply.
If you are in need of an installment agreement for more than $50,000 in tax debts or for longer than six years, you still need to provide the IRS with a financial statement. In these cases, the IRS may ask for one of two forms: Form 4330A, the collection information statement, or Form 433-F.
Finally, you should be aware of offers in compromise. An offer in compromise is an agreement that allows taxpayers to settle their tax debt for less than the full amount. Fresh Start expanded and streamlined the OIC program. The IRS now has more flexibility when analyzing a taxpayer’s ability to pay and ultimately reduces the amount the IRS will accept. This makes the offer program available to a larger group of taxpayers.
Generally, the IRS will accept an offer if it represents the most the agency can expect to collect within a reasonable period of time. The IRS will not accept an offer if it believes that the taxpayer can pay the amount owed in full as a lump sum or through a payment agreement. The IRS looks at several factors, including your income and assets, to make a decision regarding your ability to pay. You can use the offer in compromise pre-qualifier tool on IRS.gov to see if you may be eligible for an OIC.
We can help you negotiate with the IRS to get you the lowest amount you have to pay. If you have any tax problems, please give me a call or send me an email. I would be happy to help you!
First of all, you need to consider the tax liens. The Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien. That amount is now $10,000. However, in some cases the IRS may still file a lien notice on amounts less than $10,000.
When a taxpayer meets certain requirements and pays off their tax debt, the IRS may now withdraw a filed Notice of Federal Tax Lien. You must request this in writing using Form 12277, Application for Withdrawal. Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a direct debit installment agreement. You also need to request this in writing by using Form 12277.
If you default on a direct debit installment agreement, the IRS may file a new Notice of Federal Tax Lien and resume collection actions. Don’t ever miss a payment.
Next up are installment agreements. The Fresh Start program expanded access to streamlined installment agreements. Now if you owe up to $50,000, you can pay through monthly direct debit payments for up to six years. While the IRS generally will not need a financial statement, they may need some financial information from the taxpayer. The easiest way to apply for a payment plan is to use the online payment agreement tool at IRS.gov. If you don’t have web access, you may file Form 9465 to apply.
If you are in need of an installment agreement for more than $50,000 in tax debts or for longer than six years, you still need to provide the IRS with a financial statement. In these cases, the IRS may ask for one of two forms: Form 4330A, the collection information statement, or Form 433-F.
Finally, you should be aware of offers in compromise. An offer in compromise is an agreement that allows taxpayers to settle their tax debt for less than the full amount. Fresh Start expanded and streamlined the OIC program. The IRS now has more flexibility when analyzing a taxpayer’s ability to pay and ultimately reduces the amount the IRS will accept. This makes the offer program available to a larger group of taxpayers.
Generally, the IRS will accept an offer if it represents the most the agency can expect to collect within a reasonable period of time. The IRS will not accept an offer if it believes that the taxpayer can pay the amount owed in full as a lump sum or through a payment agreement. The IRS looks at several factors, including your income and assets, to make a decision regarding your ability to pay. You can use the offer in compromise pre-qualifier tool on IRS.gov to see if you may be eligible for an OIC.
We can help you negotiate with the IRS to get you the lowest amount you have to pay. If you have any tax problems, please give me a call or send me an email. I would be happy to help you!
