Do You Owe the IRS Money That You Can’t Pay? Are You a Year or More Behind in Filing Your Income Tax Returns? Are You Behind in Your Payroll Tax Filings or Payments? Our Tax Relief services and Tax Resolution assistance can help you get tax relief!
When a taxpayer fails to pay their tax debt, the IRS may place a lien on their property, which serves as a legal claim against the taxpayer's assets. This lien ensures that the government can secure the payment of the tax debt. Section 6320 of the Internal Revenue Code deals with the IRS's issuance of lien notices, a critical aspect of tax enforcement.
Upon filing a lien, the IRS is required to notify the taxpayer through a Section 6320 notice, commonly known as a Notice of Federal Tax Lien (NFTL). This notice is crucial as it informs the taxpayer of the lien's existence and their right to a hearing. The hearing, known as a Collection Due Process (CDP) hearing, provides the taxpayer an opportunity to dispute the lien or propose alternative payment arrangements, such as an installment agreement or an offer in compromise.
Receiving a Section 6320 notice can be daunting, but it is essential for taxpayers to understand their rights and options. Ignoring the notice can lead to severe consequences, including the potential loss of property. Therefore, taxpayers should promptly respond to the notice, either by paying the debt in full or by requesting a CDP hearing to explore other resolutions.
Engaging with a tax professional, such as an enrolled agent can be beneficial in navigating the complexities of IRS lien notices. They can provide guidance on the best course of action and help protect the taxpayer's rights. Understanding Section 6320 and taking timely action can mitigate the impact of a federal tax lien and lead to a more favorable resolution of tax debts.
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.
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