When it comes to taxes, the Internal Revenue Service (IRS) can seem like a daunting and scary entity. However, the IRS Fresh Start Program is designed to help individual taxpayers and small business owners who are struggling with tax debt. The program offers a variety of options for taxpayers to get their taxes back on track and avoid further penalties and fees. In this step-by-step guide, we will break down the IRS Fresh Start Program and how to navigate it successfully.
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Step 1: Determine your eligibility
The IRS Fresh Start Program is available for both individual taxpayers and small businesses. To be eligible for the program, you must meet certain criteria. For individuals, you must owe less than $50,000 in tax debt and have filed all necessary tax returns. Small businesses must owe less than $25,000 in payroll tax and have no outstanding tax liens. If you meet these eligibility requirements, you can move on to the next step.
Step 2: Determine which option works best for you
The IRS Fresh Start Program offers two main options to help taxpayers: an installment agreement and an offer in compromise. Taxpayers have two options when it comes to paying their tax debt. They can either set up an installment agreement to pay it over time, or they can opt for an offer in compromise to settle their debt for less than the full amount owed. Each option has its own eligibility requirements and application process, so it’s important to do your research and determine which option works best for your situation.
Step 3: Apply for the IRS Fresh Start Program
Once you have determined which option works best for you, it’s time to apply for the program. To apply for an installment agreement, you can either submit an online application through the IRS website or fill out Form 9465, Installment Agreement Request. To apply for an offer in compromise, you must first complete and submit Form 656, Offer in Compromise. Be sure to gather all necessary documents and information before applying to ensure a smooth application process.
Step 4: Wait for a response
After you have applied for the IRS Fresh Start Program, you will receive a response from the IRS. The response time can vary, but it typically takes anywhere from 30 to 90 days. During this time, it’s important to stay up to date on your tax payments and continue communications with the IRS to ensure the process moves forward smoothly.
Step 5: Follow through with your agreement
If your application for the IRS Fresh Start Program is approved, it’s important to follow through with the agreement. For installment agreements, make sure to make payments on time and in full to avoid further penalties and fees. For offers in compromise, follow the terms of the agreement and make sure to fully pay the agreed-upon amount. Failure to follow through with your agreement could result in the IRS canceling the agreement and reinstating penalties and fees.
It can be difficult to navigate the IRS Fresh Start Program, but it is intended to assist taxpayers in meeting their tax obligations. If you’re having difficulty with tax debt, it’s worthwhile to investigate the program alternatives. By determining eligibility, selecting the correct option, and complying with your agreement, you can successfully navigate the program and get your tax debt under control.
If you are facing difficulties in using the program by yourself, you can seek help from different resources available. You can contact the Taxpayer Advocate Service by the IRS for guidance related to tax. Moreover, several tax experts and organizations focus on helping individuals in navigating the IRS Fresh Start Program. It is recommended to reach out for help if you require it.
In conclusion, the IRS Fresh Start Program offers a viable option for taxpayers who are struggling with tax debt. By following the steps outlined above and staying informed about the program, you can successfully navigate it and get your taxes back on track. Remember, the IRS is there to help you, not hurt you – take advantage of the resources available and get back on the path to financial stability.
