Paying federal income taxes and filing the necessary paperwork with the Internal Revenue Service (IRS) is a responsibility shared by all wage earners and adults across the country. For the typical person, this is a routine process that typically involved having taxes taken out of each paycheck. For many, the end of the year when taxes are filed can be an exciting time as they could actually get some money back from the IRS.
However, there are also plenty of situations in which someone may have an unexpected event, hardship, or challenges that can result in a tax bill that is difficult to pay.
Challenges if you Fall Behind on Taxes
If you are unable to pay your federal taxes on time, you could start to experience a variety of challenges and setbacks. At first, you will start to be assessed late fees and interest if the amount is not paid by April 15. If you choose a tax extension, you still need to provide an estimated liability by mid-April date. If you continue to fall behind on taxes, you could be reported to collections, have your wages and bank accounts garnished, and even face some additional criminal or civil charges. For those that are struggling to pay their taxes on time, taking advantage of the IRS Fresh Start program can be the best option.
Benefits of Fresh Start Program
The IRS Fresh Start program is designed to help individuals that have fallen behind on their federal taxes. There are various benefits of this program, in particular, that could make it a good option for you.
Receive Affordable Repayment Plan
One of the advantages of using the Fresh Start program is that it can convert your IRS debt into a more affordable monthly payment. For those that have tax debts up to $50,000, you can request and often receive approval for a loan that will amortize over a 6-year basis. For many consumers, this could provide the breathing room they need to get back into compliance with the IRS.
Release of Tax Liens and Garnishment
A common strategy that the IRS will take to collect past due taxes is to create a tax lien and wage garnishment. When this happens, they may place a full lien on your bank accounts and put in notes with creditors. Further, they could take a large portion of your paychecks until you have paid back the loan in full. Once you enter into a plan under the Fresh Start Program, these actions will stop. This will include removing any liens and garnishments as long as you continue to pay back the loan as agreed under your repayment plan.
No Fees or Interests
One of the challenges with a tax debt owed to the IRS is that there are fees and interest charges that are applied to the past-due balance. For those that have a large amount outstanding, this can be a sizable amount that will be accrued each month. Fortunately, under the Fresh Start program, you will no longer be assessed these charges if you continue to make your payments on time.
If you are falling behind on taxes owed to the IRS, it can be a challenging and stressful situation. One way that you can manage any debt and reduce your outstanding balance is by taking advantage of the IRS Fresh Start program. This plan is designed to help people get out of debt and avoid many of the penalties that can come with falling behind on your federal income tax payments.