The IRS Fresh Start Program: How Does It Work?


The Fresh Start Program is a collective term that describes the various debt relief options offered by the Internal Revenue Service (IRS). This program aims to help taxpayers legally rise above their tax debts and penalties.

In some cases, IRS Fresh Start Programs can help freeze out or cut down your tax debt. With some plans, you can potentially pay off your debt in small amounts over a period. The Fresh Start Program comprises several changes to tax codes – it offers diverse relief options according to the individual’s financial situation. Introduced in 2011, the Fresh Start Program has helped several taxpayers to get back on their feet after experiencing rocky financial seasons. It’s rooted in facilitating reasonable repayment plans as opposed to implementing penalties.

With this arrangement, taxpayers can benefit significantly by paying off their taxes gradually and avoiding harsh punishments like jail sentences, wage garnishments, and levies. The win-win Fresh Start Program also benefits the IRS as the institution can collect something small from taxpayers instead of nothing at all.

How Does The Fresh Start Program Actually Work?

Maybe you have been wondering how you can use the IRS Fresh Start Tax Program to overcome your debt, but you just don’t know how the system works. Well, here is how it operates.

The system is designed to assist taxpayers in paying their debts in full within a timescale of six years without placing an enormous financial burden on their shoulders. This program is accessible to all taxpayers who owe the IRS up to $50,000 or lower in tax debt. In addition, the Internal Revenue Service expanded the program in 2012 to reduce the complexities associated with the qualification criteria.

With this tax relief system, you can simplify the task of repaying your significant debt and ease your worries about owing the IRS vast sums of money in terms of liens, levies, and wage garnishment, among other things.

The program is structured into three main repayment plans: tax lien withdrawals, the extended installment agreement, and OIC (Offer in Compromise).

So far, the extended installment agreement appears to be the most prevalent option for many taxpayers who owe $50,000 or lower. Under this strategy, you can pay off your tax debt within a 6-year window without incurring extra penalties or interest.

The Internal Revenue Service will stop collection actions such as tax liens and levies. Instead, you will be required to make monthly payments under the Fresh Start Program according to your income level and the value of your current assets. The idea is to make repayment models very affordable to the average taxpayer to complete their payments on time without worsening their financial conditions.

Going by the tax lien withdrawal law, you can pay off your debt using a direct payment method. Once you sign up for this program, you can ask the IRS to clear any tax liens on their accounts. This way, you would avoid the risk of having the lien reported to the three consumer credit agencies.

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