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The Ultimate Taxpayer Guide to the IRS Fresh Start Program
Taxpayers all over the country dread the words «IRS Fresh Start», yet it’s actually the simplest way to get back on the right track. It’s a program that provides relief from payment penalties, an installment agreement, a streamlined offer in compromise, and, in some cases, even a temporary reprieve for tax liens – all of which can greatly reduce the financial burden of an unpaid tax debt. Here’s the ultimate taxpayer guide to IRS Fresh Start that every taxpayer should know about.
First, let’s define eligibility. To qualify for an IRS Fresh Start program, taxpayers must a) have overdue tax debt that has been assessed by the IRS; b) be on payment plans or payment arrangements with the IRS; c) be current on estimated tax payments; and d) not have any returns that are overdue.
Now, here are four key steps to take when considering the Fresh Start Program:
1) Evaluate your current financial and tax situation: Seek professional help if needed. Estimate your ability to pay the taxes owed with an installment agreement.
2) Get an accurate picture of your debt: Review your tax returns and payment documents to understand your options.
3) Consider an Offer in Compromise: This is a contract between you and the IRS to settle your tax debt for less than the amount owed.
4) Research payment plans: Consider a variety of payment plans, such as income-based payment plans and penalty abatement plans.
Once you’ve done the above, you should have the knowledge and confidence to take the plunge into IRS Fresh Start. Here are a few more tips to help you along:
5) Read up on the rules: Stay up to date on IRS policies, guidelines and requirements.
6) Keep your records: Maintain accurate and up-to-date records of all payments and correspondence with the IRS.
7) Monitor your debts: Stay in regular contact with the IRS to ensure your payments are on track.
Now that you’ve gotten the basic tips out of the way, you may want to consider the following:
1) Use Technology to Your Advantage: There are a variety of online tools to calculate your estimated taxes, review your debt history and set up automatic payments.
2) Stick to Your Plan: Make sure you stick to the payment plan and other commitments outlined in your contract with the IRS. Generally, not being able to maintain your commitment would mean a revocation of the agreement.
3) Seek Professional Help: It is highly recommended to hire an experienced attorney or tax professional to ensure all of the paperwork is correct and executed correctly.
4) Avoid New Debt: While in the Fresh Start program, it is important to avoid taking on any new debt where possible.
5) Manage Your Cash Flow: Monitor your cash flow to make sure that you have enough to cover taxes and other financial obligations.
6) Maintain Communication: Stay in contact with the IRS and reply to any inquiries in a timely manner.
7) Be Aware of Penalties and Interest: The penalties and interest due on back taxes can really add up. Monitor them on a regular basis and adjust accordingly.
Now that you have the knowledge of the Fresh Start Program, the next step would be to consult the experts – whether it’s a qualified tax professional or the IRS itself – to see if you are indeed qualified or eligible in the program. With no obligation to pay a fee, you can be rest assured that this is the perfect opportunity to start fresh and begin building a better financial future. Could the Fresh Start Program be the answer to your tax woes?