What is the IRS Fresh Tax Settlement?

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 IRS Fresh Start Tax Settlement Plan in 2011.

Fresh start tax settlement

IRS Fresh Tax Settlement Service

If you are burdened with tax debt, the IRS Fresh Start tax settlement offers two different tax debt settlement solutions to help you get rid of tax debt and penalties. These include:

1. Offer in Compromise (OIC)

Taxpayers who can’t pay their tax debt in full might qualify for the Offer in Compromise. This may allow you to reduce your overall tax liability. Many taxpayers may also qualify for tax debt settlement solutions, but negotiating for an OIC can be very tricky. We can guide you to make a compelling case, making it more probable to attain the help you need to get back on track.

2. Installment Agreement

This solution allows taxpayers to pay their tax debt using monthly payment plans over a longer period. This agreement helps to make it easy for those taxpayers who can’t pay their tax debt all at once. This option can help you pay tax debt gradually without any penalties or tax levy.

Fresh Start Tax Settlement Plans

This plan helps the taxpayers who owe an amount of 50,000 USD or less in the form of tax, including the penalties. You 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.

What is the minimum payment the IRS will accept?

In case you owe less than $10,000 to the IRS, your agreement plan will generally be automatically approved as a guaranteed installment agreement. As long as you pledge to pay off your balance within 3 years, there is no specific minimum payment required. 

Do you Need to pay IRS Tax Installment Agreement during COVID-19 pandemic?

Well, if you cannot comply with the terms of an Installment payment agreement, you may suspend your payment during this period. It includes Direct Installment Agreement as well. Along with that, the IRS will not fault any Installment Agreement during this period. 

How much does it cost to set up a Federal Installment Agreement?

Taxpayers are just charged a one-time fee to set-up an installment agreement with the IRS. If you are a qualified taxpayer, you may enjoy a reduced fee for qualifying taxpayers. Generally, user fees are $52 for direct debit agreement, $45 for reinstatements, and $105 for non-direct debit agreement. That is how the Federal Installment Agreement works. 

Looking for the best IRS Fresh Tax Settlement Service in California?

My tax Settlement team has been helping people to take advantage of the full scope of the IRS Fresh start program for years. Our professionals are fully familiar with the program details. We can help you with a number of ways to get the best Fresh IRS repayment plan.

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