IRS Offers in Compromise/Fresh Start Program
The Internal Revenue Service (IRS) Fresh Start program was designed to make paying back taxes or avoiding tax liens easier for American taxpayers. The program provides this through the Offer in Compromise (OIC), which is an agreement between the taxpayer and the IRS that settles a taxpayer’s tax liabilities for less than the full amount owed.
An OIC is completely dependent upon the taxpayer’s ability, or inability, to pay back their taxes. Because of the complexity of the qualifying requirements—and because the majority of OIC applications that are self-prepared are done incorrectly—the majority of applications are denied. Few taxpayers are familiar with the complex formulas used to calculate the qualifications for an OIC, such as allowable expenses, expenses based on geographical location, and income and asset allocation. The result is a 95-percent decline rate in self-prepared applications.
To take advantage of an OIC and increase the likelihood that you will ultimately qualify for the program, consulting with a tax professional is essential. At Key Tax Group, we will determine if you potentially qualify for an OIC by conducting a comprehensive financial interview with you and identify the documents needed in order to give you the strongest chance for approval. Our job is simple: prevent aggressive collection activities and prevent the taxing authorities from upending your world financially by keeping them out of your bank accounts and away from your paychecks.
Additional programs offered through the Fresh Start program
Installment agreements: An installment agreement is a payment plan based on financials. Individual taxpayers owing up to $50,000 may be able to make monthly direct debit payments for up to 72 months without a financial statement, while those who need installment agreements for debts above $50,000 and more than six years to pay do need to provide a financial statement.
If your debt is under $50,000, we will set up an installment agreement that pays the debt off within 72 months. Since the payments are run through direct debit, we can ensure that a tax lien is not filed. If a tax lien already exists, then after 4 consecutive payments have been made we can petition for a tax lien removal. This is critical to the health of your credit.
Installment agreements must be carefully prepared or else the taxpayer risks the amounts being unreasonable and expensive to the point of almost unaffordable. As with any request to the IRS for any type of tax debt resolution, the help of experienced tax professionals is critical to reaching an acceptable resolution.
Tax liens: In most cases, taxpayers can owe $10,000 before receiving a Notice of Federal Tax Lien from the IRS. When certain conditions are met, including paying off their tax debt, the IRS may withdraw the filed notice. Taxpayers may also qualify to have the notice withdrawn if they are paying off their debt through the direct debit installment agreement described above.
Contact Key Tax Group For Tax Relief Solutions
Why choose Key Tax Group? We are an experienced tax law firm that specializes in only tax resolution. We proudly serve over 3,000 clients each year and have resolved more than $175 million in tax debt. We are also accredited by the Better Business Bureau and our services have been awarded an ‘A’ grade.
If you are having difficulty with tax debt or would like to learn more about Offers in Compromise, please contact us today for a free initial consultation with one of our tax professionals.