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What is the Fresh Start Initiative and Can I Qualify?

You are not alone if you are a struggling taxpayer that hopes that the IRS will just forget about your tax debt. Unfortunately, the IRS will not forget about your tax debts and leave you alone if you decide to ignore your tax liability and fail to pay them. Failing to pay taxes that are owed can lead to a host of issues including tax liens, tax levies, seizures of assets, loss of business, and even imprisonment. Compared with these types of consequences, penalties and interest fees seem like a cake walk. The truth is the IRS is a party that you can negotiate successfully with, if you are willing to communicate with them and if you are handling the communication in a way that they see as acting in good faith. You must be honest with them. You cannot hide anything.

McCauley Law Offices, P.C. can help you if you owe back taxes and you are incurring more tax penalties and interest fees.

You may have heard of the Fresh Start Initiative program that the IRS created in 2011 and expanded in 2012, to assist struggling taxpayers that are having trouble staying afloat and making ends meet. If you are having trouble paying your federal taxes than this program, for individual taxpayers and small businesses, may be the best option for you. The IRS realized that they have an obligation to help honest individuals and small businesses that have fallen on hard times and may be having a problem with paying their tax debts. The Fresh Start Initiative utilizes the IRS’s offer in compromise option for paying back taxes.

The program made changes to IRS tax policies towards installment agreements, offer in compromise terms and tax relief options. It seeks to help a greater number of taxpayers instead of penalizing a larger number of taxpayers that are having issues with paying. Some of the previous policies regarding installment agreements and offers in compromise made taxpayers file different forms and go through reviews and this program seeks to streamline these programs and make it easier for taxpayers to pay their debt.

The Fresh Start Initiative Changes Include:

The IRS has revised the calculation for the taxpayer’s future income. They now allow taxpayers to repay their student loans, and to pay their delinquent state and local taxes. They have expanded the Allowable Living Expense allowance category and amount. They have made it easier, through the Fresh Start Initiative, for taxpayers to live comfortably while still paying their tax debts. Other things that the program did to alleviate some of the strain on taxpayers was narrow the parameters and clarify when a dissipated asset will be included in the calculation of reasonable collection potential. Also, generally, equity in income producing assets will not be included in the calculation of reasonable collection potential.

Reasonable Collection Potential is now calculated by only looking at one year of future income for agreements paid in five or fewer months instead of looking at four years of projected income; two years of future income for debts to be paid in six to 24 months instead of looking at five years of projected income.
McCauley Law Offices, P.C. can help you with the OIC program and the application steps. You will be required to fill out Form 656-B and Form 656 and there are a few steps you’ll need to take if you would like to take part in the Fresh Start Initiative OIC program.

At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.

McCauley Law Offices can help!

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