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I owe the irs 63000 dollars. I paid it down to 43000 including penalties and interest. Can I use the fresh start program.

Everett, WA |

When I signed my form to agree to the tax, a collection agent said I would have to provide a full financial disclosure to get into a streamlined program. I asked him about the fresh start program and he denied he knew anything about it. That is where the conversation ended and I did not give him my financial information. What is your advice on how to pay the rest of the tax.

Attorney Answers 4

Posted

Once IRS collections division is handling your case, there are basically these 3 options for you.
1. Installment agreement that is basically a repayment plan within six years maximum.

2. Offer in compromise that is basically a settlement of all your tax liability for less than the full amount.

3. Currently not collectible status that suspends collections activities against you, but the interest keeps accruing. This is a better fit for those who are usually in their retirement age or those who have some serious factors (e.g. disability) that prevents them from ever improving their financial circumstances.

You can find more information about these options at
http://www.irs.gov/Individuals/Payment-Plans,-Installment-Agreements
http://www.irs.gov/Individuals/Offer-in-Compromise-1
http://www.irs.gov/pub/irs-pdf/p4418.pdf [Currently not collectible information]

Although you can submit the request for any of these options yourself, a tax controversy attorney who regularly deals with these request would provide the best chances for you to obtain approval.

The materials you obtain from this website by Attorney Austen Na is for informational purposes only. The materials are not legal advice, and they are not intended to be legal advice. The materials do not necessarily reflect the opinions of Attorney Austen Na. The materials are not guaranteed to be complete, correct, or current. The use of this website does not create an attorney-client relationship between you and Attorney Austen Na. You should not act or rely on the materials from this website without consulting an attorney licensed in your jurisdiction for advice regarding your individual circumstances. We invite you to contact Attorney Austen Na with the NA Law Firm, and we welcome your calls, letters, and electronic mail. However, please do not send any confidential or privileged information to the NA Law Firm until such time when an attorney-client relationship has been established or you have received written agreements from the NA Law Firm to provide the legal services that you requested. Your communications with the NA Law Firm may not be considered as confidential or privileged unless an attorney-client relationship has been established or you have received written agreements to provide legal services for you from the NA Law Firm.

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Posted

With you balance below $50,000 you should be accepted into the Fresh Start Program. The criteria to qualify for streamlined installment agreements with a balance due of $25,001 to $50,000 are:

The debt must be full paid within 72-months or prior to the Collection Statute Expiration Date, whichever is earlier.
You must be compliant with all filing and payment requirements.
Individuals who owe any type of tax (Form 1040, Trust Fund Recovery Penalty, etc.).
Businesses are limited to defunct sole proprietors who owe any type of tax (Form 940, 941, 943, etc.).
You must enroll in a Direct Debit Installment Agreement.
A limited amount of financial information may be required during the application process.

I do not provide legal advice to non-clients.

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Posted

You don't say what type if tax debt it is. It may also make sense to speak with a bankruptcy attorney. Some taxes can be discharged in bankruptcy. It can also sometimes make sense to use a chapte 13 filing to repay those taxes that cannot be discharged but grainy the benefit of a discharg for some tax and possibly the penalties as well.

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2 comments

Nicholas James Richards II

Nicholas James Richards II

Posted

Unless there are other debts needed discharge, I am finding that the new fresh start offer program works better for most clients than bankruptcy does right now. Of course, every client's situation is unique.

Deborah F Bowinski

Deborah F Bowinski

Posted

Yes, but I imagine it may depend in the dates and nature of the tax involved. Just another option to evaluate.

Posted

The Fresh Start Program does exist, as one of the colleagues have explained to you, and based on the information you provided, you do qualify. The installment agreement can be set up over the phone, where you will be asked some questions about your current financial situation. But you will not have to fax any paperwork to the IRS. If your proposed payment amount is accepted, the process requires a final manager's approval. In other words, your case will go to a manager, and once approved, you will receive a letter with further instructions. If you call the IRS 1-800 number and the person on the other end of the phone has not heard of this Fresh Start Program, hang up and call the same number again; hopefully, the next employee you get will be able to help you. (I usually write down the name and employee ID number of each IRS employee with whom I speak.)

My response to any question on this site is not, nor is it intended to be, legal advice, and it does not establish attorney-client relationship. I invite you to contact me and welcome your calls and emails. However, contacting me does not create an attorney-client relationship. Please do not send any confidential information to me until such time as an attorney-client relationship has been established.

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