IRS Fresh Start Initiative

The IRS Fresh Start Initiative was established to help you pay back taxes and avoid harsh tax liens.

Fresh Start Notice of Federal Tax Liens

The IRS changed the Notice of Federal Tax Lien threshold from $5,000 to $10,000. You can still get a tax lien if you owe less than $10,000 if the IRS deems it is warranted. Unfortunately, this change is not applied retroactively to any existing lien.

Once the lien is issued you can request a withdrawal of the Federal Tax Lien if you have paid the debt off. However, the biggest change here is the IRS allowing you to remove the Federal Tax Lien if you initiate a Direct Debit agreement with the IRS. You can request a direct debit installment agreement if your debt is less than $25,000 and you can pay the balance within 60 months.

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The Truth About The IRS Fresh Start Program

Understand what the Fresh Start Program actually is and if you can settle your taxes for less.

Fresh Start Installment Payment Agreements

The IRS changed the thresholds to request a streamlined payment arrangement based on the amount of taxes owed from $25,000 to $50,000. The maximum term to pay back taxes has been increased from 60 months to 72 months. An installment agreement is nice option to have when negotiating with the IRS.

Fresh Start Offer In Compromise

As part of the Fresh Start Initiative the IRS now offers a streamlined Offer in Compromise process. The IRS added flexibility in the financial analysis used in evaluating offers. They now request less information, request information by phone (instead of mail), and have increased their flexibility when determining your ability to pay (which means you can settle for less). Also, they have more flexibility in determining your equity in assets, your allowable living expenses, and the amount of future income to include in the Offer.
What does all that mean for you? There is no better time than now to start negotiating with the IRS.

Fresh Start Penalty Relief

Fresh Start Penalty Relief ended on October 15, 2012. The IRS granted a six-month extension to fully pay 2011 taxes with no penalties (although interest does accrue) as long as the taxes were paid in full by October 15, 2012.