There is a huge number of taxpayers who owe a large sum of money to the IRS in the form of taxes. The amount they owe becomes continuously more with the addition of interest and tax penalties. The main source of tax-paying is through a steady job and this becomes quite hard to find when a person does not have a good tax credit.
The situation becomes quite critical for some people. Even those taxpayers are greatly affected by it who genuinely want to pay taxes. To help fight this, the government announced the Fresh Start Tax Settlement Plan in 2011.
This plan helps the taxpayers who owe an amount of 50,000 USD or less in the form of tax including the penalties. They can choose one of the three payment options to get their fresh start tax settlement.
1.First Payment Option
The first option is through an extended installment agreement method. In this method, the taxpayer is given six years to pay off their owed taxes. If the taxpayer can successfully pay off their tax during this time, they can successfully avoid the interest and tax panelists. During these six years, the IRS is also instructed to abstain from any action against your assets.
2.Second Payment Option
The second option which is quite rare is payment through Offer in Compromise or OIC. The OIC helps the taxpayer to pay a smaller amount than they owe. This amount can help save a lot in some cases. But, the proposed amount by the taxpayer should reflect their financial background because it can also be rejected by the IRS in case they see that you do not appear to be as low on your financial status.
3.Third Payment Option
The last option is through a tax lien withdrawal feature. This is only valid for the taxpayers who can pay the sum of the tax they owe through direct debit. Once you are accepted by the IRS for this plan, you can write an application to the IRS requesting the withdrawal of lien from your assets.