The IRS Fresh Start tax program can help taxpayers who owe much more than they can reasonably afford. Taxpayers who file an application and consider themselves eligible can significantly reduce their federal tax debt; in some circumstances, they can reduce 90% or more of what they owe. The program was designed to give first-time tax offenders an opportunity to fix things. It allows taxpayers to pay off their tax debts over six years through monthly payments that are decided based on what they currently earn and the value of their liquid assets.
Most of the time, they eventually settle all of their outstanding dues within 6 years. Taxpayers who qualify for the program are those who are willing to pay their tax debt through installments paid over a specific period of time and who are decided based on a payment structure. The program offers taxpayers three payment options to legally and satisfactorily settle their tax debts. The criteria include factors such as demonstrating that the debt is causing undue financial hardship or whether the IRS made a mistake in evaluating the debt.
The Fresh Start Program is just one way to work with the IRS to reduce the amount of taxes you pay in order to gradually pay off historic tax debt. Managing significant IRS debt due to historic taxes can be a major concern for many families in the U.S. Fortunately, programs like Fresh Start help them manage their tax debts. If the IRS denies your request, a tax relief company can help you file an appeal letter.
This is the second option that is rare, but that taxpayers can use to settle their tax debts with the IRS. That said, the Fresh Start Program generally applies to people with a total tax debt balance of $50,000 or less and a total income of less than $100,000 ($200,000 for married couples filing jointly). If you want to avoid the possibility of your application being denied, it is advisable to contact a professional tax relief company. The IRS Fresh Start Program is designed to help taxpayers who have accumulated substantial federal tax debt that exceeds their ability to pay.
Not only does this reduce the initial balance, but it also allows you to pay off your tax debt faster by not wasting money on compound interest on penalties. The IRS's lenient approach to accepting cases and the enormous increase in Fresh Start tax relief requests were largely attributed to the COVID-19 epidemic, which caused financial problems for millions of Americans. In many of these cases, the tax debt could be significantly reduced by using the statute of limitations.