How do you qualify for the IRS Fresh Start Program?
The IRS Fresh Start Program is a valuable initiative designed to help individuals and businesses who are struggling with tax debt. This program offers various relief measures, including temporary installment agreements, reduced tax liens, and the opportunity to discharge tax debt in bankruptcy. If you are facing tax debt and are wondering how to qualify for the IRS Fresh Start Program, here’s a comprehensive guide to help you understand the requirements and the process.
Eligibility Criteria
To qualify for the IRS Fresh Start Program, you must meet certain criteria:
1. Tax Debt: You must have a tax debt that is legally enforceable. This means that the IRS has assessed the debt and you have received a Notice of Tax Due and Demand for Payment.
2. Tax Return Filing: You must file all required tax returns for the past three years. If you have not filed returns for these years, you must do so before applying for the program.
3. No Delinquent Returns: You must not have any delinquent tax returns. If you have not filed returns for more than three years, you must file them before applying for the program.
4. Financial Requirements: The IRS will assess your financial situation to determine if you can pay your tax debt in full. If you cannot, you may qualify for an installment agreement.
5. No Prior Installment Agreements: You cannot have had an installment agreement with the IRS in the past 12 months unless it was terminated by the IRS due to non-compliance.
6. No Other Tax Liens: You must not have any other tax liens or levies in place. If you have liens, you must work with the IRS to resolve them before applying for the program.
Application Process
Once you have determined that you meet the eligibility criteria, you can apply for the IRS Fresh Start Program by following these steps:
1. Financial Analysis: Gather all necessary financial documents, including income statements, expenses, and asset information. This will help you determine your ability to pay.
2. Online Payment Agreement: If you can pay your tax debt in full, you can apply for an online payment agreement. This is a streamlined process that can be completed in minutes.
3. Installment Agreement: If you cannot pay your tax debt in full, you can apply for an installment agreement. This requires completing Form 9465, Installment Agreement Request.
4. Offer in Compromise: If you believe that you cannot pay your tax debt in full and do not qualify for an installment agreement, you can submit an Offer in Compromise. This is a settlement offer to the IRS for less than the full amount owed.
5. Follow-Up: After submitting your application, the IRS will review your case. If you qualify, you will receive a notice confirming your eligibility and the terms of your agreement.
Conclusion
Qualifying for the IRS Fresh Start Program can provide much-needed relief from tax debt. By meeting the eligibility criteria and following the application process, you can take the first steps towards resolving your tax issues. Remember that it’s essential to be honest and transparent with the IRS throughout the process to ensure a successful outcome. If you’re unsure about your eligibility or the application process, consider seeking the assistance of a tax professional to guide you through the process.
