If you owe money to the Internal Revenue Service (IRS), you are not alone. According to a report cited by Investopedia, Americans collectively owe more than $130 billion in back taxes, fees, and penalties to the federal government. Digging oneself out of tax debt can be difficult, especially in the current economic environment.
The good news is that you have options available. You may even be eligible to get a “fresh start” through a relatively recent IRS initiative. At Resnick Law, P.C., we are here to help and make sure that you have the information, tools, and resources you need to protect your rights and interests.
What is the IRS Fresh Start Program?
In 2011, the IRS created the “Fresh Start” Program to help individuals and small businesses struggling with tax debt. The primary purpose of the program is to give the agency additional flexibility when dealing with struggling taxpayers, and to help them get back into good standing with the federal government. The program provides the IRS with significantly more authority to settle outstanding tax debt for less than the remaining balance.
A Taxpayer May Qualify for an Offer in Compromise (OIC)
Most notably, the Fresh Start program grants the IRS greater authority to enter into an Offer in Compromise (OIC) with a taxpayer. Simply put, an OIC is an agreement between the IRS and an individual taxpayer or small business that settles tax debt for less (often, this can be much less).
The IRS has the ability to narrowly tailor a tax debt settlement agreement to meet an individual or company’s unique circumstances and ability to pay. Oftentimes, this allows a federal tax debt to be settled for pennies on the dollar.
Key Factor: Reasonable Collection Potential
While the IRS Fresh Start program certainly makes it easier for people and small businesses to resolve tax debt, the IRS can still be challenging to deal with (as you probably already know). The IRS is not in the business of simply writing off tax obligations without good cause. So, in part of reaching an Offer in Compromise (or settlement agreement) with the taxpayer, the IRS will look at and determine an applicant’s “reasonable collection potential.”
Put another way, the IRS tries to calculate how much a taxpayer can pay without putting a serious financial burden on themselves or their family. If you are seeking an OIC through the Fresh Start program, it is crucial that you submit a strong, well-documented case. An experienced Michigan tax relief lawyer can help you get a favorable settlement with the IRS.
Call Our Detroit, MI Tax Debt Relief Lawyers Today
At Resnick Law, P.C., our Michigan debt relief attorneys have the skills and experience to help clients resolve and deal with tax debt issues. If you have any questions about the IRS Fresh Start program, we are here to help you find the best solution and provide the best resources. Contact our firm today for a free, fully confidential consultation. With a main office in Bloomfield Hills, we represent clients throughout the region, including in Oakland County, Wayne County, Macomb County, Livingston County, and Washtenaw County.