If you are mired in tax debt, you likely wonder how you can escape from this crushing debt. Fortunately, the IRS has some regulations to allow taxpayers an opportunity to rectify their tax debt. However, several qualifications must first be met. If you or a family member is interested in having your tax debt forgiven, contact an experienced Sacramento tax debt forgiveness attorney. Our firm is dedicated to providing our clients with the legal representation they need in order to manage their tax debt. The NewPoint Law Group, LLP is here to explain how to get your tax debt forgiven by the IRS.
Methods of Tax Debt Forgiveness
Possessing a large amount of tax debt can cause you a number of problems. If you fail to pay off money owed to the Internal Revenue Service (IRS), your property could be subject to a federal tax lien. A tax lien can be placed on property that you own personally or on property that you own as part of a business. If a tax debt is not paid, the IRS can then seize the property it placed a lien on. In extreme cases, your case may be submitted to the Justice Department as a criminal matter.
Fortunately, there are multiple ways to pursue tax debt forgiveness from the IRS. The following is a list of tax debt forgiveness methods offered by the IRS.
Fresh Start Initiative
The IRS Fresh Start Initiative is a series of tax regulations that were passed in order to aid taxpayers that owed back taxes to the IRS. The Fresh Start program focuses on taxpayers that are dealing with first-time tax debt. The program offers some of the following benefits:
- An increase in the amount of tax debt needed to trigger the filing of a federal tax lien being raised to $25,000 from the original $5,000
- Streamlining the process of having a tax lien removed from property that was encumbered
- The ability to have a tax lien removed if a payment plan is started for the debt
- Easing the requirements to qualify for other tax debt forgiveness plans
- Increasing the types of expenses that are considered when the taxpayer is negotiating a monthly payment plan with the IRS
If a taxpayer wants to apply for the Fresh Start program, they should also be aware of the requirements needed to qualify:
- Owing less than $50,000 in back taxes or having the capability to bring their total debt below that number
- The ability to pay off their total tax debt in a 60-month repayment plan without incurring additional tax debt during that period
- Negotiating an agreement with the IRS to repay their debt in installments and ensuring a default on the payment plan does not occur
- The taxpayer does not have any unfiled income tax returns
- The taxpayer entered into an Offer in Compromise agreement with the IRS to settle their debt within 12 months
A taxpayer only needs to meet one of the above requirements to be eligible for the Fresh Start program. It is also important to note that the Fresh Start program was expanded to include debt forgiveness for some businesses. For example, if you have a business that owes back taxes to the IRS for the first time and the company owes less than $25,000, it may be eligible for the Fresh Start Initiative.
Offers in Compromise
An Offer in Compromise (OiC) is an arrangement with the IRS that allows a taxpayer to pay off their debt for a lower amount than what they owe. If you cannot afford to pay off the entire balance of your tax debt, an OiC may be one of the best options for you. To determine whether a taxpayer qualifies for an OiC, the IRS will look at a number of factors:
- The income level of the taxpayer
- The monthly expenses of the taxpayer and the amount of money they can afford to pay
- The assets owned by the taxpayer
The IRS will typically accept an OiC if they believe they would not be able to recover the full payment of back taxes from the taxpayer. To ensure that your application for an OiC is handled with care, you should speak with an experienced tax attorney.
Roseville Tax Forgiveness Lawyers You Can Trust
If you or a family member need legal assistance to manage your tax debt, consult with an experienced Sacramento tax lawyer today. With decades of combined legal experience, the tax lawyers at the NewPoint Law Group, LLP are prepared to help you pursue tax debt forgiveness through the IRS. Our firm understands how crushing tax debt can negatively impact your life or business, and we are here for you. To schedule a confidential legal consultation to discuss your tax situation, contact the NewPoint Law Group, LLP at 1-800 358-0305, or contact us online.