Paying your taxes can be quite the buzzkill. We must all live with an unwanted part of adult life. However, for small businesses and individuals with a low income, taxes are not just a kink in their path, but something that sets them back considerably on the path to their goal.
Keeping that in mind, the IRS introduced a Fresh Start program. Introduced in 2011, this program aims to provide some relief to those who have accumulated heavy back taxes by allowing them to consolidate their tax bills and make the back payment in an orderly manner. However, this arrangement is only for those with an income tax liability.
Provisions under the fresh start program
The IRS fresh start program provides various provisions to help taxpayers lessen their burden. These include:
- Instalments are one way to lessen the burden on your shoulders when it comes to tax payments. Under this provision, the IRS extracts a certain amount from your account at regular intervals such that you do not have to pay them back all at once.
- Simplification is yet another great method to lessen the burden when it comes to the taxes that you owe the IRS. The goal of the IRS with simplification is to reduce the liability created on debtors by tax liens. Through simplification, taxpayers can now have tax liens removed on request as soon as 30 days.
- Earlier, small businesses that had a back tax payment of over $10,000, were not eligible for an instalment settlement negotiation. However, with the fresh start program, such a threshold for small businesses has now been increased to $25,000. Moreover, another good news for small businesses is that they can now pay off their back taxes or their tax debt in as long as two years.
- The IRS now also provides the option to negotiate for a compromised amount as well as an understanding that you have insufficient funds to pay them back.
The IRS has recently started being more understanding of people’s financial conditions and taking into consideration other expenses that they cannot avoid. Therefore, it has introduced several provisions, to lessen the burden and make taxes less of a hardship. Their fresh start program is one such initiative. Imagine the stress in the world before the fresh start program!