Times are difficult for many. To help, the IRS recently announced an expansion of its “Fresh Start” initiative with more flexible terms to its (OIC) program helping the most distressed taxpayers to clear up their tax problems more quickly, in approximately two years, compared to four years before the expansion.
To be accepted, the taxpayer has to show financially difficulty, and that the full amount of taxes cannot be paid, either as a lump sum or over a period of time. Before being accepted into the program, applicants you must (1) file all tax returns legally required to, (2) make all required estimated tax payments for the current year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with employees.
The IRS calculates reasonable collection potential by reviewing one year of future income for offers paid in five or fewer months (down from four years), or two years of future income for offers paid in six to 24 months (down from five years).
For full details on the program, see the IRS Form 656 booklet, available at www.irs.gov
