Tax season is nearing which means people are readying their documents and preparing to file their returns by the deadline. However, there will be millions of Americans who don’t file or pay their federal taxes. Failing to do so leads to penalties that could cost you a pretty penny. Fortunately, the IRS offers some tax relief options.
Fresh Start Program
In 2011 the IRS introduced the Fresh Start Program to help individuals struggling with tax debt. By offering payment plan options, it makes it easier for taxpayers to settle their debts and avoid leans.
- Extended installment agreements give taxpayers a longer period of time to pay their tax debts, up to 72 months, and the terms are flexible.
- An increased tax lien threshold of $10,000 means the IRS generally won’t file a tax lien if you owe less than this amount.
- Offer in compromise (OIC) modifications could allow you to settle your tax debt for less than the full amount.
- Penalty relief options to reduce or eliminate penalties for those facing financial hardship or taxpayers who have a good track record of filing and paying taxes.
Eligibility for the Fresh Start Program can be dependent on income level, debt amount, and ability to pay. There are also other criteria you must meet to qualify for tax relief.
- Your outstanding tax debt must be less than $50,000.
- You must demonstrate financial difficulty preventing you from paying your taxes in full. Detailed financial documentation may be required.
- Your tax filings must be current, so address any unfiled returns before applying.
- Since you will be required to make scheduled payments, a consistent payment history will help.
Professional Tax Relief Services
For those who don’t meet the criteria for the Fresh Start Program, there are tax relief services that can help you manage your debt by offering other solutions.
- Emergency collection relief can prevent wage garnishments or tax liens while you seek resolution.
- Experts can present your case in a manner that allows for alternative OIC arrangements to be made.
- Installment agreements that fit your financial situation can be made.
- A professional understands which penalties and interest can be abated to reduce your tax bill.
Whether you employ a tax professional or take a DIY approach, it’s imperative that you stay current with your filings. Not happy with the amount you’re paying Uncle Sam? Reach out to an FRC® trained advisor who can recommend a strategy to reduce your tax bill.
