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Though last year’s Fresh Start Initiative has had a slow start, the IRS this week announced some major updates that are designed to accelerate interest in the program.
Fresh Start is intended to help taxpayers during today’s troubling economic times who are finding it hard to pay all of the taxes they owe by the due date.
The IRS has expanded the program to include more relief from late payment penalties and double the amount of taxes that can be paid through the IRS installment program.
Fresh Start was announced last year and provides a variety of options to ease the burden on individuals and businesses that owe back taxes. It includes a decrease in the number of instances in which the IRS issues tax liens.
Regarding Late Payment Penalty Charges
Taxpayers that cannot pay their total 2011 taxes owed by April 17th may now avoid paying the 1% per month penalty until October 15, 2012. A taxpayer must still pay a 3% annual interest charge on the outstanding balance until it is paid in full.
Regarding Installment Agreements
The amount of taxes that can be paid through the IRS installment agreement plan without the need to submit a financial statement has now been doubled to $50,000. The maximum allowable payment term has also been expanded from 60 months to 72 months.
Taxpayers who participate in the program must agree to monthly automatic withdrawal direct debit payments.
The IRS was criticized for not doing enough to help taxpayers who, in many cases, were facing a greater tax burden due to tax increases, but were earning less income as individuals or in business due to the lagging economy.
Millions of taxpayers already depend upon the IRS installment program to pay their taxes. The updates to Fresh Start could double the number of people who choose the option.
At McRuer CPAs we provide a comprehensive service that offers tax planning strategies to help ease the burden taxpayers are obligated to pay as well as make certain they only pay what they owe. If you cannot pay all that you owe by the deadline, the IRS installment plan is one option with a relatively low interest rate that may help, yet we may be able to offer you more options. Contact us for more information.
To read online about Fresh Start’s new updates, here is the link to this week’s information release and video: Fresh Start Initiative Information
