IRS Fresh Start Program is an initiative by the Internal Revenue Service for those who have owed tax debt. It helps a person pay off tax debt, thereby saving them from being in big trouble. A citizen of the US, whose annual income is $70,000 or less, then, in this case, he/she has to pay 14% tax, those who are not able to do so on time, then they have to file it with heavy penalties and interest rates.
IRS Fresh Start Program
According to the Internal Revenue Service, the maximum burden of tax debt is on the class and middle class people, keeping in mind that people can get rid of it. The IRS FRESH START PROGRAM was introduced in 2011, within this program, an individual doesn’t have to pay tax debt in one go, to pay all the penalties and interest rates and get a long period of time, which makes it easier for an individual to get out of tax debt.
Under IRS Fresh Start initiative, there are 5 program, which are as follows:
- Offer in Compromise (OIC)
- Instalment Agreements (IA)
- Currently Non-Collectible
- Penalty Abatement
- Innocent Spouse Relief
Eligibility for all these programmes are different from one another, you need to know that every single individual who owes tax debt may avail the benefits to get out of tax debt. You can get details about your eligibility for IRS Fresh Start by meeting the concerned officials, scroll down to know about the required qualifications to get tax debt relief.
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IRS Fresh Start Eligibility
You must meet the eligibility criteria below in order to receive tax relief using the IRS fresh start program.
- A person should be self-employed and his annual income has decreased by at least 25%.
- If You are single, and you have an annual income of less than $100,000.
- If you are married, then you and your spouse have a combined annual income of less than $200,000.
- The amount of your tax debt must be less than $50,000.
Usually, anyone who qualifies for the IRS fresh start program gets a maximum of 5 years to pay off their tax debt, thereby saving a person from many penalties and interest rates.
IRS Fresh Start Program Benefits
Benefits of all 5 programmes of IRS Fresh Start are different from one another, out of them Offer in Compromise (OIC) and Instalment Agreements (IA) are two programs which are most used by individuals to get out of tax debit and get detailed information about them from below.
Offer in Compromise (OIC)
The Offer in Compromise debt relief program has been created by the Internal Revenue Service for taxpayers present financial conditions. By using the OIC an individual can significantly reduce their text debt amount. Using this, many individuals have got up to 90% exemption on their tax debts.
To get tax debt relief using Offer in Compromise (OIC), you will have to hire a tax professional so that he will be able to explain your financial condition well in your form and then you will get 90% exemption from your tax debt.
Instalment Agreements (IA)
Instalment Agreements (IA) is the most commonly used IRS Fresh Start program, under which an individual who owes tax debt upto $50,000 can pay it in span of six years with no interest rate or penalty. An individual even doesn’t have to pay tax liens and wage garnishments, and under this program you do not have any fear of asset seizure.
There is a time of 6 years to pay the tax debt, in which a fixed amount has to be deposited by the person every month.
If you have a debt of up to $50,000 and you can’t make a lump sum payment, you should go with the Instalment Agreements (IA) IRS Fresh Start Program, as it will save you from a lot of interest and penalties and there will be no fear of being confiscated.
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