The Fresh Start Program is a series of tax debt relief solutions offered by the IRS if you owe more to the IRS than you can afford to pay. These include the Offer in Compromise (OIC), Installment Agreement (IA), Currently Not Collectible (CNC), Penalty Abatement, and Innocent Spouse Relief.

All of these options have different guidelines and requirements. They are not “one-size-fits-all”

solutions. In addition, in order to qualify for any of these programs, you must have filed all current and past year tax returns and, if applicable, you must have made your current year estimated tax payments.

An Offer in Compromise (OIC) is an agreement between you and the IRS that settles a tax debt for less than the full amount owed. In order to qualify for an Offer in Compromise, you must prove to the IRS that you are unable to pay the amount owed within the Collection Statute of Limitations, which is the amount of time the IRS has to collect any taxes owed after they are assessed. 

This is not an easy process and entails providing the IRS with detailed financial information to show that you are unable to pay your due balance within the time frame. You may also be required to sell some of your assets in order to use the equity to pay the IRS. 

An Installment Agreement (IA) is an agreement with the IRS to pay taxes you owe within an extended timeframe. You can request a payment plan if you believe you will be able to pay your taxes in full within the extended time frame. Multiple types of Installment Agreements are available depending on how much you owe and how much you can afford to pay each month. Installment agreements do not stop penalties and interest from accruing, but they will stop the IRS from levying your bank accounts, as long as the payments are made as agreed upon. 

If the IRS agrees that you cannot pay your taxes in addition to your basic living expenses, it may place your account in Currently Not Collectible (CNC) status. In this situation, the IRS suspends certain collection actions until your financial condition improves. A CNC status does not resolve your tax debt, and applicable interest or penalties will continue accruing. 

Penalty Abatement is an administrative waiver that offers you relief from specific penalties under certain conditions. Two main types of Penalty Abatement are the following: 

• First-Time Abatement is the most common administrative waiver for individuals and businesses. Penalties eligible for this include a failure to file your taxes, a failure to pay your taxes, and a failure to deposit your taxes in the correct amount. You may be eligible for First-Time Abatement if you have a clean record with the IRS for the prior three years. 
• Reasonable Cause Abatement is relief or removal of tax penalties if the IRS determines you acted with reasonable cause and in good faith. This includes situations such as being unable to file or pay taxes because of a fire or natural disaster; an inability to get records; or the death, serious illness, or unavoidable absence of the taxpayer or immediate family.

Both you and your spouse are considered liable for owed taxes on a joint tax return. However, if you meet the requirements of Innocent Spouse Relief, the IRS will release you from liability to the owed tax and associated penalties. Here’s the criteria that may qualify you: 

• You filed a joint return with an erroneous understatement of tax responsibility relating directly to your spouse 
• You had no knowledge of the understatement error 
• You are applying for relief within two years of the IRS’s collection efforts 
• The IRS agrees that it would be fair for you to be relieved of the tax burden 

If you owe the IRS taxes that you cannot pay and you do not make payment arrangements, the IRS can do the following: 

• File Federal Tax Liens against all your assets. This gives the IRS the legal right to collect taxes from the sale of your assets, which includes literally everything you own. These tax liens show up on your credit report and often prevent you from opening a checking account or borrowing against any assets. 
• Levy your bank account or garnish your wages. The IRS can take the money in your bank account and force your employer to garnish your wages to pay the tax debt, leaving you little to no money to live on each month. 
• Seize your assets. Unlike a bank account levy, a seizure is the taking of your physical assets such as your home or car. Seizures can happen when someone repeatedly ignores requests for payment from the IRS over a long period of time.

You will be notified by mail if you are being audited. Neither the IRS nor state tax agencies initiate audits by telephone. If you are selected for an audit, you should secure Audit Representation from a qualified professional immediately. You should not go before the IRS or any tax agency without representation any more than you would go to court without a lawyer. IRS auditors are trained to extract as much information from you as they can–often a lot more than you are legally required to provide–and this can cause them to expand the scope of the audit. The result can be a hefty tax bill for you. 

The qualified representatives at Blue Slate Accounting are trained to know the right way to represent taxpayers under audit and can generally close audits quickly, saving you time, aggravation and, most importantly, money.

The IRS can and does make mistakes on tax bills. Many of these errors are the result of simple calculation mistakes concerning the application of interest, penalties, and fees. Other errors have to do with deductions and tax liabilities that have already been paid in full. You have the right to dispute any tax bill from the IRS. You may need a qualified representative such as the experts at Blue Slate Accounting to help you through this process.

Unpaid taxes don't have a direct impact upon your credit, but they could have an indirect effect. The IRS could charge you a penalty for not paying your taxes on time, along with interest on top of your unpaid taxes and penalty fees. As a result, you may have trouble paying your other bills, which could ultimately hurt your credit score. In addition, a tax lien filed by the IRS could still be discovered by lenders or credit card companies.

If you owe past due federal taxes that you cannot pay, bankruptcy may be an option. The most common type of bankruptcy is a Chapter 13, which is available to wage earners, the self-employed and sole proprietors (one-person businesses). To qualify for Chapter 13, you must have a regular income, have filed all required tax returns for tax periods ending within four years of your bankruptcy filing, and meet other requirements set forth in the bankruptcy code.

The best way to quickly get information about your IRS account is to request a transcript from the IRS. You can do so at IRS.gov or by calling the IRS at (800) 908-9946.

Every taxpayer has a set of fundamental rights that they should be aware of when dealing with the IRS. These include many entitlements such as the right to be informed, the right to quality service, and the right to pay no more than the correct amount of tax. Explore your rights and the IRS’s obligations to protect them. 

Tax resolution companies such as Blue Slate Accounting provide a full spectrum of tax problem resolution services for both individuals and businesses–and they have experts trained to help you resolve your IRS and State tax problems. Blue Slate will provide an initial no-obligation consultation to discuss the details of your tax issues and explain the possible solutions for your case.

Should you decide to become our client, we will become your legal representative, which means you no longer have to speak to the IRS. At that time, we will conduct a detailed investigation and analysis of your tax issue and come up with the best resolution options for you. We’ll help you get into compliance by filing any unfiled returns and getting you into a qualifying settlement program. We’ll also work with you to create a plan to help you stay compliant in the future. 

The cost of Blue Slate Accounting services varies based on the complexity of your needs and the services required to solve your tax problems. All fees will be explained in detail at your initial no-obligation consultation so that you know in advance what the total cost to you will be. What we do promise is excellent service at a fair price that will give you the peace of mind you need and deserve when filing your taxes or dealing with a tax issue.

You can trust Blue Slate Accounting because our team is comprised of Certified Tax Professionals and an IRS Enrolled Agent who have decades of experience in the financial and tax industries. This means we have training on the federal level to deal with the toughest IRS issues—while still having the knowledge to handle tax woes on the state and local level.

Furthermore, we have genuine care and concern for you and your business. We are on your side and will do all we can to make your yearly tax cycle as easy, productive and stress-free as possible!