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Federal IRS Tax Amnesty Programs

by: Anthony Parent   2016-03-01

In this article, I share my insight and hard lessons I learned as a tax attorney over the last 15 years. Whether you need to settle tax debts or get into compliance with unfiled tax returns, unreported income, or missing informational reports (such as foreign bank accounts), or have concerns about criminal charges, there are a variety of federal programs to help you end the uncomfortable uncertainty of a tax problem.

 

 

But first, a word about criminal exposure -- there is absolutely no need to stick your head in the sand.

 

On average, about once every six hours someone in the US is indicted for tax evasion. The question I've been asked countless times by a very worried client is "am I going to be one of them? Will I be indicted for a tax crime?"

 

And this is the answer I give: For clients who contact us immediately, we acheive great results. But for other ones who took a bit longer to reach out to us, the results are mixed. While every case can be made better, sometimes "better" only means a shorter prison sentence. Yet, don't let that scare you! Most people with low-risk are convinced of the worst possible scenario, yet are actually NOT in that bad of shape. We also find the opposite to be true: that those with really HUGE exposure don't think they are in any danger at all! 

 

 

The problem is that as a taxpayers you are kept intentionally kept ignorant on an incredible complex and powerful monster --- the IRS. The IRS has a complexity that could give anyone an anxiety attack. You couldn't be in a worse position to fully understand what is probably the greatest threat to your freedom.

 

But you need to know where you stand. And this is why having someone on your side who understands all the ins-and-outs of the IRS and the federal criminal justice system is invaluable.

 

Put thse worries behind you.   Seriously, if you have criminal concerns, just stop what you are doing and contact us now.  This is really important. Do not lose hope or feel embarrassed about proscratinating.  We can help you.  The attorney-client privilege applies to all communications to and from us. We've helped US taxpayers from around the world out of very tough spots, with more every day.

 

Federal tax amnesty includes both domestic and offshore tax debts and assessments

 

The IRS Fresh Start Program is a way for the IRS to entice taxpayers to present a collection alternative, and actually offers some benefits. It is designed to help individuals and small businesses with overdue tax liabilities. The IRS Fresh Start initiative makes it easier for individual and small business taxpayers to pay back taxes and also avoid tax liens (or get them withdrawn).

 

Who qualifies for the IRS Fresh Start Initiative?

In order to qualify for the IRS Fresh Start initiatives for debt settlement or lien withdrawals generally, you'll need to do a couple of things: The first is that any missing or unfiled tax returns must be filed. Second, typically it's required that you are current with your estimated tax payments or your current withholdings are correct, and they have been so for the last 6 months.

 

If you did not file recent tax returns, chances are you only need to file the last six years. 

 

Things get trickier with unfiled returns if there is foreign income or foreign assets involved. In that case, you may want to use one of the offshore amnesties -- even if you had no criminal intent. Why? Many of the forms for offshore assets and income have penalties that can easily exceed taxes due. By using one of the offshore disclosure amnesties, you limit your risk to these penalties.

 

 

What are the IRS Fresh Start Programs?

 

IRS Fresh Start Program #1: IRS Fresh Start Lien Program

The first IRS Fresh Start Program is the IRS Fresh Start Federal Tax Lien program. The IRS increased the threshold of tax lien filing from $5,000 to $10,000. 

 

IRS Fresh Start Program #2: IRS Fresh Start Installment Agreements

Generally, if you owe less than $50,000 to the IRS, you can get into a repayment agreement by providing minimal financial information (if that number is under $25,000, you do not need to provide anything), and if you are able to fully repay the debt in five years, you can then request a lien be withdrawn. 

 

IRS Fresh Start Program #3: IRS Fresh Start Offer in Compromise

This is actually the most helpful IRS Fresh Start program. Basically, this is how this IRS Fresh Start program works: the IRS changed reasonable collection potential calculations from multiplying your discretionary income by 60 down to 24 (when doing a period payment OIC). Essentially, it could have the following effect: in a case where your offer in compromise amount would have been $6,000 under the old rules, it could be $2,400 instead.

 

 

Offshore Disclosures

There are options for getting into compliance with undisclosed foreign accounts. The IRS treats people with offshore reporting issues a bit differently, as the penalties can be quite severe. The programs available:

 

  • Offshore Voluntary Disclosure Program (OVDP)
  • Streamlined Disclosure Process
  • OVDP Opt-Out

 

If you're unsure which program is best for your situation, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.


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