LAW OF THE LAND: Friendly side of the Internal Revenue Service — the Fresh Start Program

William Martin

If you owe more money to the IRS this year than you can pay, the IRS may file a Notice of Federal Tax Lien in the Walton County or Okaloosa County official records after giving you a chance to pay. A publicly recorded Federal Tax Lien can have a serious impact on your credit. However, the IRS’s Fresh Start program makes it easier to pay back taxes and avoid tax liens.

The Fresh Start program expanded access to streamlined installment agreements. Now, individual taxpayers who owe up to $50,000 can pay through monthly direct debit payments for up to six years. The taxpayer can apply for a payment plan by using the IRS’s Online Payment Agreement tool at Taxpayers in need of installment agreements for tax debts more than $50,000 or longer than six years will need to provide the IRS with a financial statement.

Furthermore, Fresh Start expanded the IRS’s Offer in Compromise program which is an agreement that allows taxpayers to settle their tax debt for less than the full amount. The IRS now has additional flexibility, making the program available to more taxpayers. The IRS may accept an offer if it is the most the agency can expect to collect within a reasonable period of time. The IRS may not accept an offer if it believes that the taxpayer can pay the amount owed in full as a lump sum or through a payment plan. The IRS will analyze several factors to make a decision regarding the taxpayer’s ability to pay.

If you need help dealing with the IRS, you may want to contact a qualified attorney or tax accountant for assistance.

Bill Martin is a former B-52 and B-1B pilot and Senior Attorney for the Federal Deposit Insurance Corporation. He is currently a partner in the law firm of Keefe, Anchors & Gordon in Fort Walton Beach.