IRS Fresh Start Program San Francisco
There are setbacks and problems in life that restrain you from clearing your tax debt. The debt keeps mounting, and so does your anxiety. However, the IRS Fresh Start Program is a blessing that allows you to pay your debt in installments over a while. Some of the frequently asked questions regarding the IRS Fresh Start Program in San Francisco have been discussed.
Are you struggling to pay your federal taxes?
There are issues and financial constraints in almost everybody’s life, and this might hamper your tax-paying ability. It is a cause of concern; however, you should take the appropriate steps to address the situation better. The key is to pay still whatever you are capable of to avoid the wrath of penalties. You can chalk out a plan to pay your tax debt in installments. There are multiple plans which allow you to do so. There are basic agreements as well as highly complex settlements. Get in touch with the IRS for a compromise or agreement.
What is an Offer in Compromise?
An offer in compromise is a settlement to clear your tax debt by paying an amount less than the amount due. Not everyone qualifies for the OIC, and the ones who do can negotiate with the IRS to waive off some of the debt. There are various factors to determine if you will be eligible for OIC. The IRS typically takes into account your income, your capability to pay, your expenditure, and your asset equity. The IRS offers a considerable amount of time for you to pay back the debt. Only someone going through severe financial hardships can avail the benefits of an offer in compromise.
The OIC is a promotion for voluntary compliance for paying taxes in the future and filing religiously. If you want to qualify for OIC, you should have filed all tax returns, done the tax estimates correctly, and have made satisfactory federal tax deposits if you are a businessman. There are three types of offers in compromise: OIC-Doubt as to conductibility, Offer In Compromise-Doubt as to liability, OIC-Effective Tax Administration. The most common one is Offer In Compromise-Doubt as to conductibility.
Why is the IRS making this change?
The IRS initially started the fresh start program in the year 2008. In the year 2012, they took a step ahead and expanded the program. What the IRS has done is it has made the hefty tax debts more payable with the Fresh Start program. You no longer have to pay back the large amount at once. Instead, you have a time frame of six years for clearing your dues. Pay it comfortably in installments over time. The motive behind starting the fresh start program was to ease the financial burden of taxpayers who are liable to pay up to 50,000 USD.
The IRS also took into consideration the crisis faced by many citizens like unemployment. If someone is unemployed for more than thirty days, they can get their IRS penalties waived. The offer of a six-month extension is available too. Internal revenue services offer three repayment options too. Through them, people can pay back the amount in a comfortable manner. They help people get rid of any extra penalties and interest that could further aggravate financial hardships.
How do I apply or get more information?
The application process for the IRS Fresh Start Program is relatively simple. There are two ways, either you can directly get in touch with the IRS. Second, you can seek the guidance of a tax professional for the same.
The application can take some time to get approved if you apply directly. More information is available on the IRS website on the process of application and about the program. There are many resources available online which can guide you completely through the process. You can get in touch with a tax official too for insights on the IRS Fresh Start Program.
Do I qualify for IRS Fresh Start?
Not everyone qualifies for the fresh start program, and there are few parameters to decide who gets in. If you are self-employed, then you must have reported a drop of 25 percent in your net income. Your tax balance should be less than $50,000 at the end of the financial year to be eligible. If you have not filed some taxes, then these should be filed to qualify for the IRS Fresh Start Program. You should also be current with your assessed tax or your current withholding should be accurate for the previous six months.
If you and your spouse earn more than 200,000 USD combined or you earn 100,000 USD individually, then that makes you ineligible for a fresh start. Your tax balance should not exceed the sum of fifty thousand dollars if you want to qualify.
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