When people go through a financial deficit, it can make it hard to pay bills. For those who owe taxes on top of other financial obligations, it can become burdensome.
Thankfully, the IRS provides the Fresh Start program to aid in resolving tax debt matters. There are a few important things to note about the program to help determine if it is right for you.
After the last economic depression, the government realized that many citizens needed financial relief. That is when the initial idea for the Fresh Start program came about, and the program went into effect in 2011. In short, the purpose of the program was to create a few options that qualifying parties could take advantage of to get them back on firm financial ground. Through the programs, taxpayers simplify their payments and avoid interest and other penalties.
The Fresh Start program is comprised of a few different repayment options parties may choose from. These plans include:
- Offers in compromise
- Installment agreements
- Form 12277
While most of the options provide options to help avoid negative tax repercussions, some options, such as form 12277, aid in resolving negative actions already in place. Understanding what the different options are for and how they work is essential.
To gain access to the repayment options within the Fresh Start program, parties must meet the set requirements and apply. Considering that the programs target different circumstances, they have varying requirements. Parties should become familiar with these requirements and include appropriate documentation when applying. It may also be beneficial to consult with a knowledgeable professional to ensure a smooth application and enrollment process.
While the Fresh Start programs can be helpful, they do not work for everyone. Therefore, it is important to take time and understand them to determine the best choice for your situation.