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Tax debt can feel like a never-ending battle. With steep fees and even higher interest, without a well-negotiated payment plan or settlement offer, it’s near impossible to win. The good news is a qualified Los Angeles tax lawyer, like the professionals at Tax Shark, can help arm taxpayers with the knowledge necessary to obtain debt forgiveness via the IRS Fresh Start program.
Tax forgiveness doesn’t vanquish tax debt, but it can mean a substantial reduction in the overall balance owed. With more flexible installment plans and opportunities for an Offer in Compromise (OIC), the Fresh Start Program is like a treaty leading to a debt-free future.
The Fresh Start Program allows taxpayers to pay off significant amounts of tax debt within a payment structure that is manageable. Additionally, this form of tax forgiveness helps taxpayers avoid the dreaded debt consequences of the past—wage garnishments, stiff penalties, mounting interest, tax liens, and even assets seizure.
While tax forgiveness provides hope to those in tax debt, it is still in accordance with tax law. Tax law has a dense and complicated structure. Hiring a Los Angeles tax attorney, who knows the ins and outs of the tax system, can help taxpayers get the most the Fresh Start Program.
One of the most common payment plans, utilized within the Fresh Start program, is called an extended installment agreement. This option is available to taxpayers who owe $50,000 or less. Taxpayers who qualify for this payment plan will have six years to pay off their tax bill through monthly installments.
The monthly installment amount is formulated based on the taxpayer’s yearly income and available assets. Dividing the tax bill into—as many as 72—small payments, creates an affordable agreement for the taxpayer. Additionally, taxpayers make these payments without acquiring additional penalties or interest.
The extended installment agreement is a great option, but if a taxpayer fails to keep up with the agreed-upon installments, penalties incur. Those considering this route of payment will find the help of a Los Angeles tax lawyer useful in presenting their financial situation to the IRS. With their guidance, petitioners gain peace of mind, knowing that they’re getting a payment plan that they can manage.
One final piece of tax forgiveness that comes from the Fresh Start Program is the chance for a tax lien withdrawal. If a taxpayer has a tax lien on their account due to outstanding debt, they can apply for a direct debit installment agreement. Once they enroll in the installment plan, they may formally write a request to withdraw the tax lien from their account.
The goal of the Fresh Start Program is to help taxpayers get out of tax debt. The tax lien withdrawal does not remove debt, but it allows taxpayers to maintain a favorable credit score. It also eliminates the pressure of having a lien attached to their property and any new assets.
An OIC lets taxpayers pay off their tax debt for less than they originally owed. The compromise decreases or eliminates interest and penalty fees
The OIC was designed to help taxpayers avoid financial hardship. With that, a taxpayer must prove that paying off their tax bill, in full, would be financially detrimental. The taxpayer must make a reasonable payment offer that reflects an amount they can afford to pay off throughout installments.
Offers in compromise are rarely granted by the IRS. They base their acceptance on four criteria: ability to pay, assets, income, and expenses. It is essential to present a detailed offer based on a thorough financial analysis.
The qualified Los Angeles tax lawyers at Tax Shark can help filers decide if it is worth applying for an OIC. There is an application fee, and the agreed-upon payment plan must be followed, so there is some tax strategy that comes with applying for an OIC. Additionally, a tax attorney increases the chances of presenting an offer that will be accepted.
Taxpayers looking to make the most out of the IRS Fresh Start Program can call the trusted tax attorneys at Tax Shark by dialing (205) 386-2353, or by clicking the button below.
