The Department of Education (ED) announced an initiative called “Fresh Start” to help eligible borrowers in the event of default. A fresh start will continue for one year after the COVID-19 payment break ends. First, you'll submit all your tax documents to the IRS and explain that you can't pay your debt in full. Then, you'll fill out additional forms that explain your financial situation.
The IRS will review everything and then contact you with a reasonable agreement that benefits both parties. Below is a general fact sheet about the initiative. In the coming weeks, ED will publish separate guidance for guarantee agencies that manage loans from the Federal Family Education Loan Program in arrears. They evaluate your case, understand the relevant facts, and then sit down with you to discuss your options, including the IRS Fresh Start Program.
You should consider learning more about the Fresh Start program if you're a taxpayer with a huge burden of tax debt that you can't pay right away. For more information on how to apply for the IRS Fresh Start Program, contact us for a free review of your tax case. If you're not sure which Fresh Start program is the best solution for your particular tax debt problem, you should consult a professional for advice and guidance. While the monthly payment you make through the Fresh Start Program may change, the IRS will continue to add interest to your total debt.
You cannot apply for the Fresh Start program if you have unfiled returns and must file returns timely for future years. But what exactly is the Fresh Start program and how does it work? The Fresh Start program is designed for taxpayers to pay their debts in full within six years and without placing a serious financial burden on them. You must include your unfiled or missing tax returns, your current estimated tax payments, and current withholding taxes in your recent paychecks to qualify for the Fresh Start Tax Relief Program. The IRS requires that you be up to date with all tax returns before you are considered for the Fresh Start program.
The Fresh Start provisions give more taxpayers the ability to use simplified installment agreements to catch up with back taxes and also more time to pay. While you can talk to the IRS through a trusted advocate for tax relief, no matter how many steps you take, your tax problems will never be completely erased, even if you're enrolled in the IRS Fresh Start Program. The IRS will not accept a request for tax relief through the Fresh Start Initiative without sufficient evidence. Fresh Start restores eligibility for federal student aid to nearly 7.5 million borrowers (as of May 31, 2020) to help them obtain their credential or degree; borrowers who do not complete their program of study are at greater risk of default.
Through the Fresh Start Program, taxpayers can choose to pay the IRS a regular monthly payment instead of the entire debt all at once. Next, we'll discuss the details of your situation with you to identify which Fresh Start tax program option is the most appropriate. The IRS Fresh Start Program is an excellent option for involuntary tax violators because of its flexibility.
