JULY 2013
Khaas Baat : A Publication for Indian Americans in Florida

TAX Talk: IRS Fresh Start Programs


The Internal Revenue Service’s Fresh Start initiative makes it easier for individual and small business taxpayers to pay “back taxes and avoid tax liens.” Below are some of the ways one can participate in the programs:

In-Business Trust Fund Express Installment Agreements

Small businesses who currently have employees can qualify for an In-Business Trust Fund Express Installment Agreement (IBTF-Express IA).

The criteria to qualify for an IBTF-Express IA are:

Streamlined Installment Agreements

The Fresh Start provisions also mean that more taxpayers will have the ability to use streamlined installment agreements to catch up on back taxes. Under the Fresh Start initiative, the maximum dollar criteria for streamlined installment agreements are $50,000 and the maximum term normally consists of 72 months. The criteria to qualify for streamlined installment agreements with a balance due of $25,000 or less are:

There are similar programs for streamlined installment agreements with a balance due of $25,001 to $50,000.

Offer in Compromise

An offer in compromise allows a taxpayer to settle the tax debt for less than the full amount they owe. It may be a legitimate option if they can't pay the full tax liability, or doing so creates a financial hardship. Some of the facts and circumstances are ability to pay, income, expenses; and asset equity.

Explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone. Make sure you are eligible. Before and offer in compromise is considered, the tax payer must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding.

IRS Notices and Bills, Penalties and Interest Charges

There are various limitations and thresholds for many of the tax deductions. Please consult your CPA/Tax attorney/or tax consultant for proper guidance with the above subject matter.

DISCLAIMER: In accordance with IRS Circular 230, the above information is not intended or written to be used, and cannot be used as or considered a "covered opinion" or other written tax advice and should not be relied upon for the purpose of avoiding tax-related penalties under the Internal Revenue Code; promoting, marketing, or recommending to another party any transaction or tax-related matter(s) addressed herein; for IRS audit, tax dispute or other purposes.

Suresh Kumar, CPA, MBA is the Principal of Kumar Consulting, PA, a CPA & Consulting firm licensed in the states of FL, KS, & MO and can be reached at (813) 421-5068, e-mail info@kumarconsultingcpa.com or visit www.kumarconsultingcpa.com

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