A Fresh Start Agreement (FSA) is a program that is meant to help struggling taxpayers get back on their feet by allowing them to settle their outstanding debts with the IRS for less than the full amount owed. The FSA program was introduced in 2012 as a way to provide relief to taxpayers who were finding it difficult to pay their taxes due to financial hardships.

The program was updated in 2015 with some changes that made it even more beneficial to taxpayers. The 2015 Fresh Start Agreement now offers more flexibility in payment terms and eligibility requirements. This article will take a closer look at the updated FSA program and its benefits for those in need of tax debt relief.

Eligibility Requirements

To be eligible for the FSA program, taxpayers must meet certain criteria. In order to qualify, taxpayers must have an outstanding tax debt of $50,000 or less. This includes any penalties and interest that have accumulated on the original tax debt. Additionally, taxpayers must be able to show that they are not able to pay their full tax debt due to financial hardship.

One of the major changes to the FSA program in 2015 is the expansion of eligibility. Originally, taxpayers had to prove that they were experiencing economic hardship due to unemployment or a significant reduction in income. The updated program now allows taxpayers to qualify based on a wider range of circumstances, including divorce, death of a spouse, and medical expenses, among others.

Payment Terms

One of the most significant benefits of the FSA program is the flexibility it offers in payment terms. Taxpayers can now request a longer installment agreement of up to 72 months to pay off their tax debt. This is an increase from the previous limit of 60 months. The longer payment term can be a huge relief for taxpayers who are struggling to make ends meet.

Additionally, the IRS has made it easier for taxpayers to qualify for an Offer in Compromise (OIC). An OIC is an agreement that allows taxpayers to settle their tax debt for less than the full amount owed. The IRS has expanded the criteria for an OIC, making it easier for taxpayers to qualify. This can be a great option for taxpayers who are unable to pay off their tax debt through a traditional installment agreement.

Benefits of the Fresh Start Agreement

The FSA program has many benefits for taxpayers who are struggling with tax debt. For one, it allows taxpayers to settle their outstanding debt for less than the full amount owed. This can be a huge relief for those who are facing financial hardship. Additionally, the longer payment terms and expanded eligibility requirements make it easier for taxpayers to qualify for debt relief.

The FSA program can also help taxpayers avoid more severe penalties for failing to pay their taxes. The IRS can impose penalties such as wage garnishment, bank levies, and property seizures on those who fail to pay their taxes. By participating in the FSA program, taxpayers can avoid these penalties and work towards resolving their outstanding tax debt.

Conclusion

The Fresh Start Agreement program is a great option for those who are struggling with tax debt. The 2015 updates make it even more beneficial for taxpayers by offering expanded eligibility requirements and more flexible payment terms. If you are in need of tax debt relief, the FSA program may be the solution you have been looking for. Contact your tax professional or the IRS directly to learn more about the program and its benefits.