Are you unable to timely pay your taxes due to unemployment, home foreclosure, or financial hardship? Coast One Tax Group can assist you in navigating through the recently retooled IRS Fresh Start Initiative. The IRS Fresh Start Initiative is a federal tax relief program. The Fresh Start Initiative is designed to make it easier for taxpayers to obtain tax relief.
The Fresh Start Initiative is designed to help taxpayers unable to timely pay their tax due to financial hardship. The Fresh Start Initiative is a group of separate IRS programs, consisting of the following:
Which of these Fresh Start Initiative Programs do you qualify for? Which of these Fresh Start Initiative Programs work best for you? Coast One Tax Group can assist you in figuring this out.
It boils down to your total monthly income verses your total IRS allowed monthly expenses. The most basic individual work sheet that you can use to list these is the IRS Form 433-f. The IRS Form 433-f can be downloaded via the internet. However, it is not the only one – the IRS Form 433-a is more detailed, as is the 433-b for businesses. Do your total IRS allowed monthly expenses equal or exceed your total monthly income? If so, do you NOT own any real property or assets? If this is the case, then you might qualify for an Offer in Compromise, Economic Hardship Partial Payment Plan or Currently Non-collectable (CNC) Status. Coast One Tax Group can explain which program is best for you.
Under the Offer in Compromise program, the taxpayer offers a lump sum in settlement of the tax liability. The offer amount is less than the total tax owed. The offer amount is based on detailed financial forms submitted to the IRS. By statute the IRS has approximately ten years to collect the tax owed (the CSED Date). Under an Installment Agreement, you make monthly payments to pay off your tax. What if you cannot afford the monthly payments necessary to pay off the tax in ten years? Under the Economic Hardship Partial Payment Plan, you only make a monthly payment that you can afford. You do not pay the full amount of your tax. After the CSED date has passed any remaining tax is reduced to zero.
This is why in industry jargon the Economic Hardship Partial Payment Plan is called a back door OIC. Just as with the OIC, for an Economic Hardship Partial Payment Plan you must submit detailed financial forms. If you cannot afford to pay anything at all to the IRS, the IRS may agree to classify your case as Currently Non-Collectable (CNC) Status. So long as your case is in CNC Status, the IRS will not take any collection action against you. After the CSED date has passed, your tax balance will be reduced to zero. Coast One Tax Group negotiates Fresh Start Initiative programs with the IRS for our clients every day. Negotiating Fresh Start Initiative programs with the IRS is our bread and butter!
However, even in this very basic example, nothing is simple when it comes to taxes. First, not all monthly living expenses are allowed by the IRS. Certain monthly living expenses, such as how much rent you can list, are capped by IRS National Standards. Monthly rent is based on the county you live in and the number of people in your household. The IRS National Standards are available via the internet. Get the picture? Unfortunately, resolving a tax problem is seldom easy. If you own real property and you have equity in your property, things become even more complicated. Coast One Tax Group can help you to avoid pitfalls like the IRS National Standards.
So, which Fresh Start Initiative Program is best for you? You can review IRS Form 433-f with an IRS Recognized Representative to get an idea.
IRS Recognized Representatives can represent taxpayers before the IRS. An IRS Recognized Representative is either an attorney, a Certified Public Accountant, an accountant, or an Enrolled Agent. An Enrolled Agent is someone who had passed the Special Enrollment Examination (SEE).
Coast One Tax Group is a company knowledgeable in all Fresh Start Initiative Programs. We are a group of IRS Recognized Representatives – attorneys, accountants and Enrolled Agents. My colleagues and I work hard to obtain the best tax resolution (settlement) possible for our Clients! Last year (2018), on average, we saved our clients a minimum of 92% of the amount of back taxes owed, and we have substantiated claims to prove it! Unfortunately, we cannot win them all. We cannot guarantee, for example, that ultimately the IRS will grant your specific Offer in Compromise. However, we will never submit an OIC unless it is a strong case. If you do not have a strong OIC case, we will tell you. And, we will find the best Fresh Start Initiative Program that you do qualify for!