Fiore Tax Resoution

Understanding the IRS Fresh Start Initiative

In 2012, the Internal Revenue Service (IRS) introduced the Fresh Start Initiative to assist taxpayers facing financial difficulties. Here’s what you need to know:

Individual Qualification Requirements

Your Federal tax filings are all up to date, including for the current taxable year.
You owe the IRS less than $50,000. If necessary, you can take action to reduce your IRS indebtedness to $50,000 before beginning the IRS Fresh Start Program.
This is your first time that you have ever fallen behind on any tax debt to the IRS.
You agree to a direct payment installment agreement. Under a direct payment installment agreement, you agree to pay the IRS the liability that you owe in a series of installment payments over an extended time period.
You will maintain the direct payment installment agreement, you will continue to stay up to date with all your tax filings, and you will not incur any additional tax debt to the IRS while you are making your installment payments under the direct payment installment agreement.
You will fully pay off your outstanding liability to the IRS in no more than 60 months.
You can also file for an Offer in Compromise (OIC) and be able to pay the OIC settlement amount within 12 months. Under an OIC, you “offer” to “compromise” your tax liabilities by paying a certain lesser settlement amount to discharge these liabilities.

If you meet these qualifications, you can apply using IRS Form 1127-A, Extension of Time for Payment of Income Tax Due to Undue Hardship.

Business Qualification Requirements

Your business is up to date with all of its Federal tax filings and tax payments.
Your business owes the IRS less than $25,000.
This is the first time your business has ever fallen behind on any tax debt to the IRS.
Your business will fully pay off its outstanding liability to the IRS in no more than 34 months.

Federal Tax Liens and Benefits

The Fresh Start Initiative raises the threshold for the IRS to file federal tax liens, making it easier to avoid them. It also simplifies the process for lien withdrawal after full payment of tax debt.

Payment Options

The program facilitates installment agreements for small businesses with balances up to $25,000, requiring full payment within 24 months. In addition, individuals earning up to $100,000 may be eligible to apply for an Offer in Compromise.

Representation and Assistance

Fiore Tax Resolution experts have extensive experience with IRS programs and can help you navigate the Fresh Start Initiative. Contact us today for personalized assistance in resolving your tax debt.

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A short call with one of our tax resolution specialists could change everything. Let’s talk about your options and how we can help you resolve your tax situation—for good.

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FAQs

Have questions about tax resolution? You’re not alone. Here are a few answers to some frequently asked questions. There are many more, so be sure to visit our FAQs page to see them all.

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How do I know if I qualify for a settlement?

The process to qualify for a tax debt settlement is dependent on your personal financial situation. To find out if you qualify, schedule a complimentary consultation with one of our tax consultants, and be prepared to answer questions regarding your monthly income and expenses, additional assets to your name, and your total tax liability.

What is the Fresh Start program?

The Fresh Start program, also known as the Offer in Compromise, allows a taxpayer to settle their tax debt for a portion of the full amount owed when proven that the taxpayer is experiencing a financial hardship. If accepted, the Offer eliminates all outstanding balances with the IRS and releases any potential liens placed against the taxpayer.

What is the difference between a tax levy and a tax lien?

While both are collection tools used by the IRS, a tax lien and a tax levy are not interchangeable terms. A lien is a claim to a taxpayer’s property due to a tax debt, while a levy is the actual action of seizing a taxpayer’s property.