In 2011, the IRS began to implement a series of policy changes known as the “Fresh Start” initiative.
What does that mean to the ordinary taxpayer? Basically, the intent of the initiative is to make it easier for taxpayers to pay back taxes, avoid IRS liens, and get tax relief through an installment agreement.
The threshold for filing a tax lien went from $5,000 to $10,000, except in certain cases. It’s also easier to remove a lien from your credit report once it has been released, (paid in full). In the past, a lien would stay on your credit report for up to seven years. As part of the Fresh Start Initiative, the IRS may now issue a “withdrawal” of a tax lien after it’s paid, which will remove it from your credit records. They are also a lot more willing to deal. An Offer In Compromise is when the IRS agrees to settle your tax obligation for less the actual amount owed. They look at your income and assets to make a determination of the “reasonable collection potential.” Depending on the circumstances, they can also issue full or partial penalty abatements. These “Deals” can be arbitrary and subject to the interpretation of the Agent you are dealing with. For best results, it’s always to your advantage to have professional representation during negotiations with the IRS. It can make a big difference in the outcome.