• Facebook
  • Twitter
  • Linkedin
BACK TAXES HELP
  • Tax Problems
    ▼
    • Tax Problems Overview
    • Audit
      ▼
      • Audits Overview
      • Audited and Can’t Pay
      • Avoid Tax Audit
      • Statute of Limitations
    • Business
    • IRS Letters
    • Tax Levy
      ▼
      • Tax Levy Overview
      • Bank Levy
      • IRS Asset Seizure
      • Protect Assets
      • Release Tax Levy
      • Social Security Garnishment
      • Tax Levy Appeals Process
      • Wage Garnishments
    • Tax Lien
      ▼
      • Tax Lien Overview
      • Release or Withdrawal of Tax Lien
      • Appeal Tax Lien
      • IRS Form 14135: Discharge Tax Lien
      • IRS Form 12277: Request Lien Withdrawal
    • Tax on Settlement of Consumer Liabilities
    • Tax Penalties
      ▼
      • Tax Penalties Overview
      • Failure to File Penalty
      • Failure to Pay Penalty
      • IRS Interest Underpayment
      • Late Filing Penalty
      • Late Payment Penalty
      • Tax Evasion
      • Tax Fraud
      • Trust Fund Recovery Penalty
    • Unfiled Taxes
      ▼
      • File Back Taxes
      • Unfiled Taxes Return
      • Unfiled Tax Return Consequences
    • Unpaid Taxes
      ▼
      • Unpaid Taxes Overview
      • IRS Collections: How The Process Works & How to Stop It
      • Find Out Tax Amount Owed
      • IRS Statute of Limitations
  • Tax Solutions
    ▼
    • Tax Solutions
    • Bankruptcy
    • IRS Tax Appeal
      ▼
      • IRS Tax Appeal Overview
      • IRS Collection Due Process (CDP)
      • Collection Appeals Program (CAP)
    • Payment Plans
      ▼
      • Payment Plans Overview
      • Installment Agreements
      • Short-Term Extension
    • Tax Settlement
      ▼
      • Tax Settlement Overview
      • Innocent Spouse Tax Relief
      • Offer in Compromise
      • Penalty Abatement
      • Prove Financial Hardship
      • Tax Negotiation
  • State Tax Relief
  • About Us
    ▼
    • About BackTaxesHelp
    • Tax Professionals
      ▼
      • Tax Professionals Overview
      • CPA
      • IRS Enrolled Agent
      • Tax Attorney
      • Tax Resolution Services
      • Taxpayer Advocate Services
      • Low Income Taxpayer Clinic
      • Tax Relief Scams
    • Tax Services
      ▼
      • Our Tax Services
      • Tax Process
    • Testimonials
    • Our Team
    • Get A Quote
  • Resources
    ▼
    • Resources Overview
    • Back Taxes FAQ
    • Forms: IRS and State
    • How To
    • IRS Phone Numbers
    • Power of Attorney
    • Tax Filings
  • Tax Blog
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Back Taxes Help HomepageBack Taxes Help

Get tax help

Call for a Free Consultation800-928-5035
Call for a Free
Consultation
800-928-5035
  • Tax Problems
    • About Tax Problems
    • Audit
    • Business
    • IRS Letters
    • Tax Levy
    • Tax Lien
    • Tax on Settlement of Consumer Liabilities
    • Unfiled Taxes
    • Unpaid Taxes
  • Tax Solutions
    • About Tax Solutions
    • IRS Tax Appeal
    • Repayment Plans
    • Tax Settlement
  • State Tax Relief
  • About Us
    • About BackTaxesHelp
    • Tax Professionals
    • Tax Services
    • Testimonials
    • Our Team
    • Get a FREE Quote
  • Resources
    • Tax Resources
    • Back Taxes FAQ
    • Forms: IRS and State
    • How To
    • IRS Phone Numbers
    • Power of Attorney
    • Tax Filings
  • Tax Blog
Home / Tax Law Changes / IRS Fresh Start Program – What it Means for Taxpayers

IRS Fresh Start Program – What it Means for Taxpayers

July 17, 2012 By Manny Davis

  • Facebook
  • Twitter
  • Linkedin

money

On May 21 of this year, the Internal Revenue Service expanded its Fresh Start plan.  The plan supplements the Offer in Compromise (OIC) program that makes it possible for some people who owe back taxes, but are in financial distress, to settle their accounts with the IRS.  The Fresh Start initiative makes it possible for many such taxpayers to settle with the IRS sooner than had been the case in the past.  Taxpayers who qualify for the program can expect to pay less—sometimes significantly less—as part of the settlement than they owe in taxes.

The terms of the Fresh Start program figure to provide many significant advantages to delinquent taxpayers, from the likelihood of qualifying for an OIC and the terms of the agreement, to the ability to settle some other liabilitys. (Decreased collection actions due to Fresh Start Tax Program can be seen here)

What Is an Offer in Compromise?

An OIC is a legal agreement between the IRS and a delinquent taxpayer that settles the taxpayer’s account for less than the amount owed.  The IRS typically does not accept an OIC application if it believes that the taxpayer will be able to repay all of his/her tax liability in one payment or via a payment schedule.  Over the past few years, roughly a quarter of OIC applications have been accepted, with an average repayment settling of approximately 14 cents per dollar owed in tax.

What’s New in Fresh Start?

The IRS has publicly acknowledged a huge number of taxpayers in financial distress in announcing Fresh Start, with the expectation that many more OIC applications will be submitted this year and a higher percentage of them will be accepted.  Many estimates of the acceptance rate are in the neighborhood of 40%—much higher than in the past.
Among the new points to OIC as a result of the Fresh Start program are:

  • A change in the way the IRS calculates an estimate of future earnings by taxpayers.  The previous method had used estimates ranging from four to five years.  The new standard is only one to two years.
  • The allowances for living expenses will be increased, to the benefit of taxpayers.
  • Taxpayers will be allowed to repay student loans.
  • Taxpayers will be allowed to pay delinquent taxes to states and local jurisdictions.
  • Many taxpayers can expect to be able to fully settle their tax problems in as little as two years, compared with the four- to five-year period that had previously been commonplace.

The Bottom Line for Taxpayers

Essentially all of the changes that are being implemented as part of the IRS’s Fresh Start Initiative work to the benefit of taxpayers.  Taxpayers are more likely to have their OIC applications accepted than ever before; living expenses are being more generously calculated than in the past, which should lead to better repayment terms.  Taxpayers will be allowed to clear up a number of other, credit-shattering liabilitys and the process can be expected to be completed in half the time—or less—as in previous years.  Financially distressed taxpayers are encouraged to look into the new program as soon as possible.

Primary Sidebar

Tax Problems?





Categories

  • Business Taxes
  • Celebrities
  • Entertainment
  • FAQ
  • Filing Taxes
  • How To
  • Installment Agreements
  • Payment Plans
  • State Taxes
  • Tax Audit
  • Tax Credits & Deductions
  • Tax Filing Extension
  • Tax Help
  • Tax Law Changes
  • Tax Levy
  • Tax Lien
  • Tax News
  • Tax Opinion
  • Tax Settlements
  • Tax Tips

SUCCESS STORIES

  • "I was in a tough situation. I didn’t have much money and I couldn’t pay my tax balance.  I was able to pay off my taxes over time with an agreement. Thanks again!"
    ~ Brian J., Orange, CA

  • "Thank you so much for your diligence in taking care of our situation. You were always available when we needed to ask questions, and you should be proud of your professional handling of our case!"
    ~ Mr. Wilson, Taylor, TX

  • "I had used another company previously, and I had concerns initially but you guys put me in good hands and in no time flat. This is such a weight off of my shoulders."
    ~ Mr. Szramiak, Philadelphia, PA

  • "My back taxes had been haunting me for years & the bank levy happened so quickly; I’m glad I had I requested a free consultation. Everyone is astonished they got all my money back so soon. I am eternally grateful!"
    ~ Mr. Mason, Minneapolis, MN

Resolve Your Tax Problems Today!

GET A FREE TAX ANALYSIS

Footer

53 Halloween Blvd.
Stamford, CT 06902
PH: 203-813-7549
Toll Free: 800-928-5035
admin@backtaxeshelp.com
Call for a Free Consultation
800-928-5035

facebooktwitter
Back Taxes Help
  • Resources
  • Sitemap
  • Privacy Policy
  • Terms of Use
  • Contact
  
Back Taxes Help BBB Business Review
Privacy Seal
Security Seal
ASTPS
  

Copyright © 2023 BackTaxesHelp.com


Disclaimer: We are not affiliated with the IRS, any private tax collector, or any state tax agency. The information provided on this website is for general educational or informational purposes only. Nothing on this website should be interpreted as legal or tax advice for any individual or business tax case. Before taxpayers sign up with a tax relief or tax resolution company, they should request a free consultation in order to understand how tax relief services work and the associated costs. The free consultation comes with no obligation to use any product or services. In many cases, a reputable tax resolution firm can provide taxpayers with relief.  

Scroll Up