Managing a large amount of tax debt is a problem that can be extremely stressful, and that can cause additional issues. If you have a tax bill that is too large, you risk the possibility of having a tax lien placed on your property or the possibility of having your case referred to a criminal court. If you or a family member need assistance applying for a debt forgiveness program, contact an experienced California tax attorney today.
The NewPoint Law Group understands the issues that taxpayers face when dealing with insurmountable tax debts, and we are here for you. Our firm has worked with residents of California in a wide variety of tax law claims, and we would be honored to work with you. To schedule a confidential consultation to discuss your tax debt, contact the NewPoint Law Group at 1-800 358-0305, or contact us online.
How the Fresh Start Initiative Works
The IRS Fresh Start Initiative (FSI) is used to help taxpayers that accumulated too much debt. The FSI is not an IRS program, but rather a series of laws that were designed to help taxpayers who owed a large amount of back taxes. While these laws were passed around the 2011 tax year, many people have recently become interested in the benefits offered by the FSI.
The FSI has a multi-step approach to helping taxpayers manage their unpaid taxes:
- Requiring a taxpayer to owe at least $25,000 in back taxes before the IRS can file a federal tax lien on property owned by the taxpayer
- Streamlining the process to have a tax lien released after tax debt has been paid off
- Making tax debt installment agreements easier to obtain for small businesses and other taxpayers
- Altering the requirements for the Offer-in-Compromise (OIC) program to make it more accessible to taxpayers
Eligibility for the Fresh Start Initiative
Before you can apply for the Fresh Start Initiative, you should ensure that you meet the qualifications. For example, if a taxpayer owes less than $50,000 in back taxes, they may qualify to apply for the debt forgiveness program. Other qualifications for the FSI debt forgiveness program include:
- The taxpayer can pay off their debt in 60 months or less
- This is the first time that the taxpayer has owed back taxes
- The taxpayer has kept their income tax returns current
- An installment agreement is agreed to between the IRS and the taxpayer
- The taxpayer does not accrue additional back taxes after entering into the installment agreement
It is important to note that a taxpayer does not have to meet all of the requirements listed above to be eligible for the FSI debt forgiveness program.
Additionally, if a small business is having issues with paying back taxes, they could also be eligible for the debt forgiveness program under the following circumstances:
- The business does not possess more than $25,000 in back taxes and has the capability to pay their back taxes within 34 months
- The business has maintained current income tax returns, including federal employment tax filings
- The business never owed back taxes before
Choosing a Repayment Option
If you owe back taxes and are eligible for the FSI debt forgiveness program, you should also be aware of the repayment options available to taxpayers. One form of repayment is the installment agreement.
The IRS offers multiple installment agreement repayment options, from long-term plans to partial-pay installment agreements. Before a repayment option can be entered into, the taxpayer must negotiate with the IRS to determine which plan they are eligible to apply for.
If a taxpayer misses a payment on the installment agreement, the IRS may rescind the arrangement, and the taxpayer may have to seek other options besides the FSI program.
Another repayment option is the Offer-in-Compromise (OiC). The OiC is a negotiation between the taxpayer and the IRS in order to eliminate a portion of the debt owed to the IRS. The basic premise is that the taxpayer cannot possibly afford to repay the full amount of their taxes, so the IRS should decrease the amount of debt owed.
Applying for an OiC can be difficult, but our firm is here to guide you through the process.
Our Experienced California Tax Debt Lawyers Can Help You Apply for the Fresh Start Initiative
If you or a family member want to apply for the IRS debt forgiveness program, contact an experienced California offer in compromise lawyer. The legal team at the NewPoint Law Group possess decades of combined legal experience, and we are ready to use this knowledge to provide you with the legal representation that you deserve. To schedule a confidential consultation, contact the NewPoint Law Group at 1-800 358-0305.