In 2011, the Internal Revenue Service (IRS) launched the Fresh Start Initiative and later expanded the program to help taxpayers resolve their tax debt. The program allows taxpayers to be placed on affordable payments based on their finances, avoid tax liens being filed, made an easier lien withdrawal process, and made changes to the Offer In Compromise (OIC) program making this option more realistic for offers to be accepted.
Many taxpayers find themselves in a panic state each year because they are unable to pay their tax debt. With a lack of tax knowledge, many taxpayers do not take advantage of options available to resolve their tax debt. In order to qualify for the Fresh Start Initiative, you must first be compliant with the filing of your tax returns and be current with the Estimated Tax Deposit (ETD) payments if you are self-employed.
The Fresh Start Initiative allows taxpayers to take advantage of the following available programs:
1. Offer In Compromise - The IRS now only calculates one year of future income and also allows expenses such as student loans, state taxes, and other expenses.
2. Tax Lien Changes - The IRS will not file a tax lien if the balance owed is less than $10,000.00 versus the previous threshold of $5,000. In some cases, tax liens can also be withdrawn by entering into a Direct Debit Installment Agreement (DDIA) with three successful payments DDIA. With the Fresh Start Initiative, the taxpayer can enter into a payment plan for 72 months for any assessed balance up to $50,000.
At LifeBack Tax we exhaust all resolution possibilities and strive to have cases accepted through the Fresh Start Initiative. I have personally represented many taxpayers and have either successfully placed their accounts on DDIA and/or achieved an OIC settlement. It is pleasure and a sense of achievement knowing that a taxpayer is finally getting the fresh start that they deserve.