TAX LIENS. The Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien. That amount is now $10,000. However, in some cases, the IRS may still file a lien notice on amounts less than $10,000.

When a taxpayer meets certain requirements and pays off their tax debt, the IRS may now withdraw a filed Notice of Federal Tax Lien. Taxpayers must request this in writing using Form 12277, Application for Withdrawal.

Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a Direct Debit installment agreement. Taxpayers also need to request this in writing by using Form 12277.

If a taxpayer defaults on the Direct Debit Installment Agreement, the IRS may file a new Notice of Federal Tax Lien and resume collection actions.

INSTALLMENT AGREEMENT. The Fresh Start program expanded access to streamlined installment agreements. Now, individual taxpayers who owe up to $50,000 can pay through monthly direct debit payments for up to 72 months (six years). While the IRS generally will not need a financial statement, they may need some financial information from the taxpayer. The easiest way to apply for a payment plan is to use the Online Payment Agreement tool at IRS.gov. If you don’t have Web access you may file Form 9465, Installment Agreement, to apply.

Taxpayers in need of installment agreements for tax debts more than $50,000 or longer than six years still need to provide the IRS with a financial statement. In these cases, the IRS may ask for one of two forms: either Collection Information Statement, Form 433-A or Form 433-F.

OFFER IN COMPROMISE. An Offer in Compromise is an agreement that allows taxpayers to settle their tax debt for less than the full amount. Fresh Start expanded and streamlined the OIC program. The IRS now has more flexibility when analyzing a taxpayer’s ability to pay. This makes the offer program available to a larger group of taxpayers.

Generally, the IRS will accept an offer if it represents the most the agency can expect to collect within a reasonable period of time. The IRS will not accept an offer if it believes that the taxpayer can pay the amount owed in full as a lump sum or through a payment agreement. The IRS looks at several factors, including the taxpayer’s income and assets, to make a decision regarding the taxpayer’s ability to pay. Use the Offer in Compromise Pre-Qualifier tool on IRS.gov to see if you may be eligible for an OIC.

If you have an unresolved IRS tax debt relief situation, contact Direct Tax Relief.  Our team of tax attorneys will review your tax situation and determine if the IRS Fresh Start program is the best approach.

Source: https://www.irs.gov/newsroom

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“This phase of Fresh Start will assist some taxpayers who have faced the most financial hardship in recent years,” said IRS Commissioner Doug Shulman. “It is part of our multiyear effort to help taxpayers who are struggling to make ends meet.”

The new IRS Offer in Compromise rules include:

Revising the calculation for the taxpayer’s future income

IRS now looks at only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years. All offers must be fully paid within 24 months of the date the offer is accepted.

Allowing taxpayers to repay their student loans

Minimum payments on student loans guaranteed by the federal government will be allowed for the taxpayers after high school education.

According to tax specialist Harry Galstian from Direct Tax Relief, “In the past years, the Internal Revenue Service consistently applied its Offer in Compromise rules with respect to the taxpayer’s financial situation; therefore, a good majority of taxpayers who applied for the Offer in Compromise program got rejected. This new policy is going to assist more taxpayers that are suffering due to the economic crisis and have a financial hardship.”

Allowing taxpayers to pay state and local delinquent taxes

Monthly payments to state taxing authorities may be allowed in certain circumstances if taxpayers owe delinquent federal and state or local taxes and do not have the ability to fully pay the liabilities.

Expanding the Allowable Living Expense allowance category and amount

Standard allowances incorporate average expenses for basic necessities for citizens in similar geographic areas. These standards are used in cases requiring financial analysis to determine a taxpayer’s ability to pay. The National Standard miscellaneous allowance has been stretched. Taxpayers can use the allowance to cover expenses such as credit card payments and bank fees and charges.

Direct Tax Relief is an A-Rated company and accredited by the Better Business Bureau that consists of tax attorneys and Enrolled Agents.  The firm represents taxpayers from all 50 states and focuses on providing quality professional services at reasonable rates. Direct Tax Relief has successfully negotiated settlements for their clients at an average of 12 cents on the dollar.  For a free tax relief consultation regarding the IRS Fresh Start Program and or other tax problems, you may call (800) 505-4134.

Source: http://www.prweb.com/releases/2012/11/prweb10124099.htm

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