Colorado Springs: Is There Really an IRS Fresh Start Initiative?

 

No, there is no active IRS Fresh Start Initiative.  If you visit www.irs.gov and type in "Fresh Start Initiative" there is no reference to an existing program.  Back in 2011 changes were made to  help taxpayers who are struggling to pay their tax debts.  The changes aimed to make it easier for individuals and small businesses to pay back taxes and avoid tax liens. There were several key benefits and changes to existing IRS policies to provide relief to taxpayers.

One of the main policy changes increased the threshold for filing a tax lien. Previously, the IRS would file a lien if a taxpayer owed $5,000 or more, but under the revised policies this threshold was increased to $10,000. This change helps protect taxpayers' credit scores and provides more time to pay off debts without the added pressure of a lien.

These policy updates expanded the Offer in Compromise (OIC) program, which allows taxpayers to settle their tax debt for less than the full amount owed. The IRS now considers a broader range of financial hardships when evaluating OIC applications, making it more accessible to those in financial distress.  There are still financial thresholds and standards that taxpayers have to meet to qualify for an OIC.

Additionally, more flexible installment agreements were introduces. Taxpayers who owe up to $50,000 can now qualify for streamlined installment agreements, allowing them to pay their debt over six years without providing extensive financial documentation.  Although, it may be advantageous to apply for a lower payment.  

Overall, when you hear advertisements for the "IRS Fresh Start Initiative" know that the actual program ended in 2012 and search for a tax professional who will help you to eliminate the stress and overwhelming fear of dealing with the IRS.  Then you will sleep better at night knowing that you can feel successful and thankful that you have completely met all your tax obligations.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Is a Doubt as to Collectability Offer in Compromise Really Possible?

Do you feel numb and overwhelmed because of owing $20,000 or more to the IRS?  Have the IRS notices been stacking up? You hear an advertisement on the radio or see one on the television claiming that the IRS will settle your tax debt for pennies on the dollar.  You sit back and ask yourself is this really possible? Or, you think that it is too good to be true?

My answer to your questions is that with the proper guidance and professional assistance you can qualify for an IRS settlement.  But, you must complete the IRS process and provide substantiation of your claim. You must also have mountains of patience.  The process with the IRS can take time.

How do I know this?  About two years ago I had a new client come in with over $80,000 in taxes owed going back to 2013.  After completing an analysis of the taxpayer's circumstances and documents, I was able to determine that the taxpayer would qualify for a Doubt as to Collectability Offer in Compromise.  I completed the paperwork, gathered the support for what was stated on the OIC form, and had the taxpayer sign the OIC form.  I then submitted the package to the IRS.

After we received an acknowledgement letter, a few weeks later, it took about one year to get the initial response of a denial of the taxpayer's claim.  Since we felt we had a strong case, we appealed the initial result.  After a few months and some some communication with the appeals officer, we finally received the acceptance letter.  We were able to settle the taxpayer's $80,000+ debt for $100.  We both expressed a sigh of relief.  The taxpayer now has two responsibilities 1) pay the $100 and 2) stay tax compliant for the next 5 years.

This case shows that we can help taxpayer's to resolve tax debts they are unable to pay.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: What Does Doubt as to Collectability Mean?

 

Many taxpayers feel helpless and isolated when they have a large tax bill with the IRS.  In many cases they think there is nothing that they can do, but just do their best in trying to make payments.  Often times the taxpayer's circumstances do not allow them to really make any payments thus leaving them feeling embarrassed about not knowing what to do or where to go for solutions.

Are you perhaps feeling the pain of IRS notices and liens?  With the proper guidance you may qualify for a Doubt as to Collectability Offer in Compromise(OIC) with the Internal Revenue Service (IRS).  How does a taxpayer qualify for a Doubt as to Collectability OIC?

If you are suffering from financial hardship this could be the best option for you.  However, you must prove to the IRS that your assets an income are insufficient to pay the tax.  To apply you must include documents supporting your income and expenses.  There must also be a completed detailed financial disclosure.  The IRS uses national and local standards to evaluate a taxpayer's ability to pay.

After careful review the IRS may determine that you qualify for a small settlement and are unable to make full payment. If the IRS makes this determination, you have a limited amount of time to make the payment offered.  Plus, you must stay tax compliant for the next 5 years or the tax debt will reappear and you may have to start this process all over again.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: Should I File an Offer in Compromise to Resolve my Tax Debt?

 

 

 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

Colorado Springs: How do I qualify for an IRS Installment Agreement?

If you owe the IRS a large tax debt that you are unable to pay in full, the notices and prospect of the IRS coming after you can be intimidating.  What can you do if do owe the IRS a large sum that you are unable to pay in full?  Should you just ignore the IRS? Or, is there an option available for you to sleep well at night and get peace of mind?

Under Section 6331 the IRS can help you with by setting up an installment agreement.  The installment agreement will help you to mange your tax obligation.  You will be allowed to pay over time in order to get caught up with your tax obligations.  How can a taxpayer qualify for an installment agreement?

If the specific requirements are not meant, the IRS will not even consider or allow a taxpayer to start an installment agreement.  First, a taxpayer must be tax compliant.  This means that all all required tax returns must be filed.   The amount you owe is also important.  Is an installment agreement best for you?  It may or may not be, depending on your facts and circumstances.

Working with a tax professional who will do an analysis of your situation is highly recommended to determine if the installment agreement or possibly an offer in compromise is better for you.

If an installment agreement is the way to go then I recommend enrolling in a Direct Debit Installment Agreement (DDIA). This ensures timely payments directly from your bank account, reducing the risk of default. The monthly payment amount must settle the debt within 72 months or before the Collection Statute Expiration Date, whichever comes sooner.

Depending on the size of the amount owed, you may qualify for a Streamlined Installment Agreement.  With this type of installment plan there are no forms required and no documents needing to be submitted. You are automatically accepted.  For certain large amounts owed you will need to complete forms and submit documents.  Working with a tax professional who can analyze your situation, will walk you through the process and make simple for you to resolve your tax debt and avoid further collection actions.

 

 

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

 

 

 

Colorado Springs: Can I Really Settle My Tax Debt for Pennies on the Dollar?

The simple answer to the question in title of this blog is "maybe".  Why do I say that?

 

The IRS provides a lifeline for those who either cannot pay or who doubt they actually owe the tax  through the Offer in Compromise (OIC) program, governed by Section 7122 of the Internal Revenue Code. This program allows taxpayers to settle their tax liabilities for less than the full amount owed for those who qualify.  Taxpayers have to be patient as this process can take at least a year to complete.

 

To qualify for an OIC a taxpayer must calculate their RCP using guidelines provided by the IRS that include both actual expenses and nation standards.  Once RCP is calculated the determination is made whether a taxpayer qualifies for the OIC or has to set up an installment agreement and full pay.

I recently completed a case that took over a year for the IRS to send us the OIC acceptance letter.  The taxpayer was unable to pay the tax in full after calculating the RCP.  This was a doubt as to collectibility offer.  We were able to settle an $80,000 plus debt for $100.  The taxpayer has two responsibilites now: 1) To make the $100 payment and 2) Stay tax compliant for the next five years, including making estimated tax payments if required.  If these two conditions are not met, the taxpayer can become liable once again for $80,000 tax debt.

We cannot settle every case for such a small amount.  Each taxpayer's facts and circumstances are unique.  Only a full analysis of your situation can determine what the best course of action will be.  Using a local Enrolled Agent(EA), CPA, or tax attorney who will complete such an analysis is highly recommended.

Section 7122 on Offer in Compromise is a valuable tool for taxpayers in distress.  However, this path requires careful preparation and a clear understanding of the obligations involved. Consulting with a tax professional can enhance the chances of a successful application.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com