Need Help Paying Your Tax Bill?
Owing money to the IRS isn’t a good feeling. If you owe taxes but don’t have the money or ability to pay, don’t worry. The IRS’ Fresh Start Program aids taxpayers who have difficulties paying their taxes.
What is the Fresh Start Program?
The Fresh Start Program at the IRS began in 2008. It was implemented during the recession to help taxpayers pay their tax bills and avoid wage garnishments and liens. It provides two options, Installment Agreements and the Offer In Compromise Program, for paying your tax liability. The Fresh Start Program is available to both individuals and small businesses.
The IRS offers payment plans. If you owe the IRS less than $50,000, you can take up to 72 months to pay by entering into an Installment Agreement. Unfortunately, interest still accrues on the unpaid balance. However, the IRS currently charges only 5% interest on unpaid tax debt. That’s cheaper than putting it on your credit card or securing a personal loan from a bank. It’s important to note that by enrolling in an installment agreement, you must allow the IRS to directly debit your bank account each month.
Offer In Compromise
If your tax bill is so large that you can’t pay it in full within 72 months, you may use the Offer In Compromise program. With this program, you and the IRS agree to settle your tax bill for less than the full amount. The IRS will review your ability to pay, income, expenses, and asset equity to determine if you qualify.
Whether you enter into an Installment Agreement or the Offer In Compromise program, you must stay current on all your tax reporting requirements. You must also make all scheduled payments on time. Missing a deadline allows the IRS to terminate your agreement and demand payment in full.
If you have a past tax debt or unfiled tax returns contact us so we can evaluate your situation and help you resolve your issue.