TL;DR: Are you or have you ever been overwhelmed by the taxes that you owe? Are you looking for a way to get back on your feet without having to pay an arm and a leg worth of interest rates, penalties, and fees? If so the IRS Fresh Start Program is a great option for individuals and bus This guide explains who qualifies, the rules that apply, and how to apply them to your situation.

4 Main Programs That Goes Into The Fresh Start Program

Are you or have you ever been overwhelmed by the taxes that you owe? Are you looking for a way to get back on your feet without having to pay an arm and a leg worth of interest rates, penalties, and fees? If so the IRS Fresh Start Program is a great option for individuals and businesses who are seeking relief from their tax debt. This federal relief program contains 4 main programs that go into producing the results many taxpayers strive for.

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Offer In Compromise

An Offer in Compromise is a proposed settlement with the IRS. It typically involves paying off your tax debt for less than what you owe, but without filing for bankruptcy. The IRS will take into account factors like income and expenses when they determine whether or not to accept an offer from you. You may also be able to combine the offer of compromise with other repayment options such as Installment Agreement or Payment Plan

Even if it seems that the government is offering a great deal, make sure that this option is best for you before taking them up on their offer! There might be something else out there that would work better for your financial situation. The IRS will take into account a variety of factors, including your ability to pay, income, expenses, and asset equity.

Installment Agreement

An installment agreement with the IRS allows taxpayers in combined tax liabilities to come up with a payment plan designed on their own timeline. There are many benefits associated with this kind of agreement.

Though it is preferred that taxpayers should pay their liabilities in full, people who are having trouble with the IRS and their taxes owe it to themselves to look into an installment agreement. It can give them the time they need in order to make a payment plan that is manageable for them.

Currently Not Collectible

If the IRS determines that you are unable to pay any portion of your tax debt, your account may be marked as Currently Not Collectible, delaying collection until your financial situation improves. The fact that your debt is Currently Not Collectible does not mean it will go away; it just means the IRS has assessed that you cannot afford to pay it at this time.

You are still obligated to file tax returns and keep records of any income earned during this period, but your debt cannot be collected until the IRS deems it currently collectible again. Additionally, interest continues to accrue on your existing outstanding balance at a rate determined by law.

IRS Penalty Abatement

The fourth program is Penalty Abatement. This status suspends the collection of late-payment penalties and prevents levy/garnishment actions taken by the government when a taxpayer cannot pay their tax debt in full, or even at all. The government will also not attempt to collect any interest that has accumulated on your account since you first became a CNC account.

This program is different from Currently Not Collectible, because penalty abatement suspends penalties and interest on the debt, whereas CNC is simply the IRS terminating their attempts to contact and seek collection from you.