When Mary Shelley Andersson, a long term nurse provider from Evanston, Illinois, found out that she owed over $34,000 from a tax debt in 2016, she was shocked.
“Since I file as an independent contractor, it’s hard to keep track of everything come tax time,” Andersson said, “I didn’t have that kind of money to pay it back. I didn’t know what to do.”
Andersson’s tax debt began to grow rapidly due to the daily compounded interest and the Failure-To-Pay penalty fee that was attributed to her debt every month.
“I started searching online to see what I could do. I heard about the Fresh Start Program, but didn’t think that I qualified because I owned my home.”
It’s a common misconception, perpetuated by the IRS, that taxpayers wouldn’t qualify for tax relief because they either don’t owe enough in tax debt or their financial situation is not dire enough to warrant relief.
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Despite the IRS’s attempts to limit information about the Fresh Start Program from being easily accessible to the taxpaying public, the program continues to grow every year.
In 2018, the IRS forgave hundreds of millions of dollars in tax debt through the Fresh Start Program saving millions of taxpayers from financial ruin.
“The Fresh Start Program saved changed my life. I was able to get completely free and clear from the IRS. They’re not hanging over my head anymore, and I thank God every day for that.”
Installment Agreement or Offer in Compromise? Click Here to see which Fresh Start Program is right for you.
How the Fresh Start Program Saves You Money
To be eligible for the IRS Fresh Start Program, a taxpayer needs to prove that their tax debt has put them in a significant financial hardship.
An Installment Agreement is the most popular relief program offered by Fresh Start because it is the easiest to qualify for and the IRS still collects a substantial amount of money from it.
Most taxpayers can secure their own Installment Agreement without the assistance of a tax relief company, and it is usually a common recommendation for taxpayers who owe less than $5,000 to the IRS to seek an Installment Agreement independently.
If you owe more than $5,000 to the IRS, you may still be able to secure your own Installment Agreement with the IRS without representation, but be aware that depending on your situation, your monthly payments can be upwards of $750 a month.
Before agreeing to any terms of an Installment Agreement with the IRS, it is often best to have a tax attorney review your case to ensure you are paying the lowest monthly payment possible.
Offer in Compromise
An Offer in Compromise allows for your debt to be settled for a lesser amount but is far more difficult to qualify for.
To qualify for an Offer in Compromise, a taxpayer must prove that not only can they not pay their tax debt in full, but they also will never be able to pay off their debt without suffering severe financial hardship.
The IRS will only accept an offer if the case is properly presented, and it is advised that you hire a tax attorney or tax relief company to represent you.
What You Need To Qualify For The Fresh Start Program
There is not a singular checklist, that the IRS uses to determine eligibility for the Fresh Start Program.
Acceptance into the program is determined on a case-by-case basis and requires proof that paying the tax debt would put the taxpayer in severe financial hardship.