IRS Fresh Start Program in Florida

If you are being burdened with a lot of tax debts and cannot seem to find a way out, then do not worry. The IRS has a program developed just for situations similar to yours. The IRS Fresh Start Program is a program that helps you to pay off your substantial tax debts within six months in an easy and hassle-free manner. Taking into account your liquid assets and your current income, you get to pay an amount according to these each month. Therefore, within six years, you will be free of your tax debts without a problem. Let us now take a look at some of the most frequently asked questions about the IRS Fresh Start Program.

Guidelines for IRS Fresh Start in Tampa, Florida

If you are willing to apply for the IRS Fresh Start Program, then the first step would be to get in touch with the IRS itself. Once getting your request, the IRS will respond to your request, upon which you may consult a tax professional to discuss your course of action further. But before that, you will need to make sure that you are qualified for it by taking into consideration the following:

  • You must have a reasonable installment agreement for IRS
  • There must be a reduction in your outstanding debts of tax
  • An abatement of penalty
  • Pardon of the tax debt due to hardships of finance

Does the IRS forgive tax debt?

The IRS has forgiven a debt. There are options for you to appeal for a compromise such as Form 656, which allows you to apply for an ‘offer in compromise,’ but complete forgiveness of the debt is rarely the case. Even so, even a compromise is allowed to individuals who are going through desperate financial hardships. Some examples are that of enormous expenses for health-care or losing a job or very low chances of generating income. Only then you may qualify for said clause, but that too happens very rarely.

One of the programs or settlements the IRS provides is the Offer in Compromise. In an OIC, you can settle your debt for a lesser amount than what you owe. The purpose of an OIC is that the IRS knows it is not always possible for it to recover tax dues. This is especially true in cases where the debtor does not have any significant property which can be subjected to levies and liens. In this scenario, the IRS has only two options: Either receive nothing or accept some amount at least. So, if you feel that you can get the IRS to agree for a settlement, go for the offer in compromise. A research was conducted which revealed that debtors get away with paying only twenty percent of the debt amount.

Will my IRS debt ever go away?

The IRS has a period of ten years to collect a tax debt. This is known as the 10 Year Statute of Limitations. The date on which ten years are completed is known as the ‘Collection Statute Expiration Date,’ which starts from the moment an action is taken to initiate or create liability. This usually starts from the moment a tax return file is submitted with ‘unpaid balance.’ IRS is also infamous for estimating the CSED differently than the tax debtors. This is often the case when the person has not paid his taxes in full or has paid partially. The year of assessment has a dubious nature most of the time. The clock of assessment can pause at various times due to certain reasons which include filing an offer in compromise, filing bankruptcy, filing a lawsuit against the IRS, signing a waiver to extend the CSED, filing various appeals etc.

After the stipulated ten years period, the IRS will clear the account balance and bring it to zero. Any tax liens filed during this period become legally unenforceable and expire. When the CSED is nearing, the IRS resorts to aggressive techniques to recover the unpaid amount. They could also act as a friend and offer various agreements to clear the dues. Some of the deals even involve extending the CSED. Before signing any agreements pertaining to the CSED, the guidance of a tax professional is recommended.

How much will the IRS usually settle for?

The IRS has various things to consider before determining the settlement amount. They have an elaborate formula which they use to determine it. Factors such as how much you can pay per month against your settlements, monthly expenses, monthly income, your assets, and so on are taken into consideration. These are put together in a formula that the IRS uses to determine the amount. Usually, this amount rounds up to $6,629. However, it may differ as your financial elements may fit differently to the IRS formula.