Tax Planning Owe Money? Get a Fresh Start with the IRS Fresh Start Initiative Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Published Oct 15, 2012 - [Updated Jul 11, 2019] 2 min read Are you behind on your taxes but still looking for a tax break? Sound too good to be true? Actually, you just might be the perfect candidate for the Internal Revenue Service Fresh Start Initiative. Fresh Start Initiative In recognition of the challenging times many people continue to face due to the lackluster economic recovery, the Fresh Start Initiative (FSI) provides some people with a little breathing room. The Fresh Start Initiative changed four components to help struggling taxpayers: Tax Liens Installment Payments Offers in Compromise Penalties 1. Tax Liens The Fresh Start Initiative increases the Notice of Federal Tax Lien filing threshold from $5,000 to $10,000. Although the IRS might still choose to file a tax lien notice at a level less than $10,000, doing so is less automatic. In addition, the Fresh Start Initiative makes it somewhat simpler to have a lien withdrawn after payment. You can use Form 12277, Application for Withdrawal to request the lien withdrawal once you have filed all of your tax returns and paid all of your back and current taxes. 2. Installment Agreements Like with Tax Liens, the Fresh Start Initiative’s provisions raised thresholds on balances due and the time given to pay tax liability. Specifically, the maximum total for streamlined installment agreements has been doubled by FSI from $25,000 to $50,000. Furthermore, the length of time you have to pay back the taxes you owe has increased from five years to six years. To start the Installment Agreement process, read the Instructions for Form 9465. Then, complete Form 9465, Installment Agreement Request. 3. Offers-in-Compromise The Fresh Start Initiative also provides for a streamlined Offer-in-Compromise process. An Offer-in-Compromise is IRS-speak for the IRS acceptance, as full payment of your back taxes, some amount less than the full amount owed. To determine if you’ll qualify, you’ll need to complete Form 656-B, Offer in Compromise Booklet. The streamlined nature provided by the Fresh Start Initiative enables you to share less financial data and, generally speaking, provides you with more flexibility as it considers your ability to pay your tax liability. 4. Failure to Pay Penalties If you are even a day late paying your income taxes, you are ordinarily subject to interest charges and penalties based on the amount of your payment shortfall. However, the Fresh Start Initiative allows you to delay paying your 2011 taxes due by April 17, 2012 until October 15, 2012 – without being subject to any failure-to-pay penalties. Interest will still be charged, however. Taken together, these four benefits of the Fresh Start Initiative can be valuable in landing you back on your feet. If you’re behind on your taxes, consider taking advantage – the Fresh Start Initiative presents not only a great opportunity to get your finances back in order but also lets you sleep better at night. Previous Post 3 Last Minute Tax Tips for Extension Filers Next Post How Long Do I Need to Keep My Tax Records? Written by More from One response to “Owe Money? Get a Fresh Start with the IRS Fresh Start Initiative” I have not paid my taxes in 5 years, what should I do? Can I still get a refund? Reply Leave a ReplyCancel reply Browse Related Articles Tax Planning Still Have Tax Debt? The IRS Fresh Start Initiative May… Tax Planning Six Tips to Beat the October 15th Extended Tax Deadline Tax Planning Options for Taxpayers Who Can’t Pay Their Tax Lia… Tax Planning Unable to Pay Your Tax Bill? Here’s What To Do Tax Planning 5 Tax Tips for the New Year Tax Deductions and Credits Are Political Donations Tax Deductible? Rules Around Co… Tax Deductions and Credits Family Taxes: Take Advantage of Tax Savings Tax Planning Tips to Help Stop Procrastinating (on Your Taxes) Tax Tips International Student Tax (File for F-1 Tax Returns) Tax Tips Tax Burden By Country (How the US Compares Internationa…