Thousands of American today live in deep anxiety because they owe money to the IRS and can’t pay. Others have gotten behind on filing tax returns for several years but are afraid to get caught up. Some know they are in arrears with taxes, but they just pray the IRS never finds out.
That’s a terrible burden to carry through life.
Well, you might be surprised to know that the IRS isn’t always the frightening monster we hear so much about in the media. True, the IRS has a certain reputation for coming down hard on “tax cheats,” or even people who ran afoul of tax liability by innocent mistake.
However, the IRS is only interested in one thing – making sure people pay the taxes they owe, and collecting what they can even if that means sometimes taking less.
A FRESH START
To this end, the IRS developed what it calls the Fresh Start Program. It’s designed to help honest people come out of the woodwork, approach the IRS if they are in tax trouble and work something out without fear of penalty, or even jail time!
Again, the IRS is far less interested in tossing you in jail or turning you over to debt collectors than it is in brokering a deal so that you can settle your tax debt.
The Fresh Start initiative makes it a lot easier for both individuals and small businesses to pay back taxes, avoid liens and further negative consequences.
WHO QUALIFIES FOR A FRESH START?
Two things are needed to access the Fresh Start Program:
(1) You must catch up with filing all your returns in the event you missed a year or several years.
(2) You must be current with your current tax payments, or be correct with your withholding over the past 6 months.
Note that if you have not filed for a long time you may only be required to file for the past 6 years.
WHAT ARE THE KEY GUIDELINES?
Some experts point out that the IRS is being deceptive by calling its Fresh Start initiative a “program.” That’s because it’s not really a program but actually, a set of guidelines added to the way the IRS does “business as usual.”
The important point is that by using the guidelines as outlined by IRS policy, you can get your own personal “fresh start” on your tax situation. The key categories of these guidelines are:
• Penalty Abatement
• Installment agreements
• Offers in compromise
• Lien release requests
• Business and payroll tax problems
Now let’s take a brief look at each category:
Under certain circumstances, the IRS may agree to abate or lower any penalties you have incurred. This includes for failing to file returns, failing to pay on time and failing to deposit taxes as required. The IRS website has a penalty appeal “self-help tool” you can click on to help you with this.
Next, an installment agreement is simply a sum of money the IRS will let you pay monthly, rather than require paying the whole sum at once. You can negotiate payments by working with the IRS.
Believe it or not, the IRS often will accept a compromise on what you owe. That means you can pay less than what you owe if the IRS agrees. That’s because the IRS understands that drawn-out collection efforts cost time and money. Sometimes it’s just easier to “make a deal.”
One of the great things about owning nothing – no property, no money, no tangible assets – is that the IRS has a lot less power over you. However, if you do own valuables they can put a lien on any of it. But you can make a deal with the IRS to release a lien if you set up a payment plan with them.
Finally, Fresh Start guidelines address business and payroll tax problems. This tends to be a complex and sticky situation, but the bottom line is that the IRS will compromise even on this kind of tax debt if you talk to them about it.
Getting your taxes paid is never easy or fun, but getting behind with the IRS leads to a life of fear and anxiety. The IRS Fresh Start guidelines may help you return to a life of peace and contentment — at least in terms of your tax situation.