All You Need to Know about the Fresh Start Program for Clearing Tax Debt - Growth Freaks

All You Need to Know about the Fresh Start Program for Clearing Tax Debt

woman calculating her taxes

If you owe money to the IRS for your taxes, and you’re wondering if there’s something you can do to pay them faster, then you’re going to want to hear more about the Fresh Start Program that they came up with. This program is designed to help people pay back their taxes and avoid liens that secure said payments. Today, we’re going to tell you everything you need to know about the program, from how it works, to what it’s good for, and how you can apply for it.

How Does the Fresh Start Program Work?

1. It Affects Tax Liens

One of the most important features of this program is the fact that it affects the way the IRS handles tax liens. Typically, a tax lien is the government’s way to lay claim to some of your properties if you don’t pay your debt. Once the government has filed a tax lien, the IRS can also file a Notice of Tax Lien. This alerts creditors that the government has claimed part of your property.

Because of the Fresh Start Program, the IRS won’t file such a notice unless your debt is higher than $10.000. This is great news since this notice would affect all of your assets, even new ones that you acquire after the notice has been filled, and would stop you from receiving a credit. This program also allows you to get the notice withdrawn. Even if you’ll still have to pay the debt, the negative aspects we mentioned above might be avoided if you do this.

2. It Affects Installment Agreements

An installment agreement typically allows you to pay your taxes in monthly payments. The good news about the Fresh Start Program is the fact that you can access these kinds of agreements more easily. By signing an installment agreement, you might be able to avoid certain penalties. The program has simplified the process. So if you owe $50.000 at most, you can pay them each month over the course of 6 years. You don’t even have to provide a financial statement. The financial statement is only required for debts larger than $50.000.

3. It Affects Offers in Compromise

An offer in compromise happens whenever the IRS agrees to allow you to pay less than the amount you owe. However, this can only happen if they think you have no way of paying the money, either upfront or through an installment agreement. This means that the IRS is going to be looking at your assets, income, expenses, and so on.

The Fresh Start Program has improved this type of offer by making it more flexible. So if you apply for this program, you might end up paying less than you actually owe. The IRS now thinks of other factors, such as student loans or local taxes, as well.

How Can You Apply for the Fresh Start Program?

First of all, you should know that this program consists of several smaller relief options. Consequently, each of them comes with different requirements. Still, no matter which one you apply for, you must file your tax returns when it’s required of you.

If you want to know what programs you qualify for, you can find that out here. If you want to apply for a program, you can do that by filling a Form 9465, or accessing the IRS website.

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Author: Amanda Knowles