If you find yourself in the position of owing taxes to the IRS, and you’re worried you won’t be able to pay them back on time, it’s important to know how the IRS wants you to address the situation. When the recession hit the nation in 2008, the IRS realized that if people didn’t have a reasonable way to pursue paying back their taxes, they’d simply go bankrupt, so the agency adopted the Fresh Start Program to help those in need. Take a look at how it works.
To avoid bankruptcy, tax liens, tax levies, and wage garnishments, the IRS Fresh Start Program offers several options to those who need tax debt relief of $50,000 or less.
If you are overdue on your tax payment but can now pay what you owe along with late penalties and interest, then you are eligible to make a lump-sum payment directly to the IRS. If you need more time, you can negotiate an installment agreement on either a short-term (120 days or less) or long-term payment plan, each with additional fees attached. If you’re in a more desperate situation, the IRS will consider an application for an Offer in Compromise, through which it agrees to a more reasonable payment structure based on your personal financial circumstances.
The Success of the Fresh Start Program
Whether you have individual or business tax burdens you can’t handle, the Fresh Start Program has expanded its program to help more people than ever. From its inception, Offer in Compromise usage has increased steadily, with more than 24,000 applications approved in 2019 alone. Any option you choose within the Fresh Start Program will stop the IRS from collection activities that could affect how you handle your wages and assets and save you from other credit nightmares.
How to Apply for Fresh Start Programs
If you’re thinking about applying for one of the Fresh Start Program’s options, then you will need to learn how to apply according to the IRS mandate’s guidelines. No matter which option you choose, you must be up-to-date with your tax returns, then go to the IRS website to either submit your lump-sum payment or to apply for a payment plan or an Offer in Compromise.
If doing all the research necessary to make the correct decision sounds like a hassle, you’re not alone, which is why many decide to hire a tax professional to take care of these matters for them. It’s important to avoid scammers who promise unrealistic results and ask for upfront payments without clear means of fulfilling their guarantees. If you want the best results, hire a certified public accountant or a respected name in the tax preparation business to get the work done right.
Dealing with the IRS can be a harrowing time, especially if you receive a notice of an overdue payment. Instead of disregarding your tax debt, take immediate action to remedy the issue with the help of a professional.
Image via Flickr by hang_in_there.