The IRS recently announced a new effort called the “Fresh Start Program,” designed to alleviate much of the debt suffered by taxpayers behind on tax payments. The program allows debtors more leeway for debt negotiation when it comes to installment agreement requirements for many taxpayers, an extension of the period of time a taxpayer has to pay any balance due under installment agreement, as well as a revision of the required calculation of future income a taxpayer may gain.
All About Fresh Start
For individuals interested in the Fresh Start Program as a means of debt negotiation with the IRS, there are a variety of rules and regulations to understand before making the call. On the plus side, the program includes provisions to give debt negotiators the power to use installment agreements to pay off remaining tax debt. In order to qualify for an installment agreement, a debt-owing taxpayer must have already filed required tax returns and be already up to date on the previous years tax requirements.
A big push in the IRS program is the streamlining of the installment agreement process. In addition, outstanding liability for debt negotiation in relation to tax debt has been increased from $25,000-$50,000. Also, the IRS no longer requires a complete disclosure of all financial materials at the outset. This protects debtors from potentially handing the IRS what is essentially a treasure map to all of their remaining assets. Basically, this new provision allows those suffering tax debt to “plead the Fifth” on their asset holdings.
There are unique regulations dealing with businesses involved in the program. A massively impacted part of the program is the In-Business Trust Fund Express Installment Agreement. This installment agreement streamlines the process for paying payroll tax liabilities. Businesses that owe $25,000 or less can qualify, as long as they get this paid in full within 24 months prior or before the expiration date of the collection statute (whichever comes first). It is also important that the taxpayer is already compliant with full filing in payment requirements.