7 Tips for Louisiana Taxpayers Applying to the Fresh Start Program

September 15, 2022

Millions of people are struggling to pay their taxes due to reduced earnings, the spiraling cost of living, and high fees and penalties for filing or paying late. If you’re worried about your tax bill, you should contact a Louisiana tax resolution specialist who can explain the fresh start program IRS to you. This is a set of options designed to help people get out of debt, either by reducing their total bill or spreading out the payments.

People who believe they can’t pay their taxes in full can make an offer in compromise or apply for currently not collectible status. If your spouse is responsible for the bill, you can claim innocent spouse relief. Alternatively, you could check whether you can have some of your penalties abated, or you could make an installment agreement, which allows you to pay your taxes over many months or even years.

7 Tips for Louisiana Taxpayers Applying to the Fresh Start Program IRS

1. Contact a Louisiana Tax Resolution Specialist

Some people skip hiring an expert and apply for the IRS forgiveness program on their own. While this occasionally works, it’s much harder than most people think. For example, the vast majority of offers in compromise filed by individuals get rejected, and the ones that get accepted often require the taxpayer to pay much more than they would if a specialist had filed their offer. 

For this reason, it’s almost always best to contact a tax resolution specialist as soon as you realize that you’ve made a mistake or you won’t be able to pay your taxes on time. This professional can analyze your bill and go through your financial situation with you. Then, they can explain the various options and help you apply for the best one available to you.

2. Check if You Can Have Your Penalties Abated

If you’ve missed the filing deadline for your taxes, you have to pay 5% extra for each month, and if you’ve filed the return but failed to pay, 0.5% of the total will be added to your bill each month. What’s more, there are interest payments, which accumulate daily. As you can see, the penalties for filing and paying late are hefty, and they can add a significant amount of money to your total balance.

Fortunately, people who have never had any trouble with the IRS and those who have a good reason for filing or paying late, such as a death in the family or a serious illness, can get their penalties removed from their accounts. This could be one of the easiest and quickest ways of reducing your tax bill and making your debt more manageable. If you believe you qualify for penalty abatement, you should ask your tax resolution specialist about this option.

3. Go Through Your Finances to See if You Can Pay Your Taxes Over Time

One of the first things your tax expert will do is go through your finances to figure out where you stand and whether you can pay off your tax bill over time. If your income exceeds your regular expenses and you have some money to spare each month, it’s likely that you will be able to get rid of your debt. In this case, setting up an installment agreement, which allows you to pay your taxes over several months or years, could be a good idea.

This is one of the easiest tax resolution strategies. Usually, it can be set up with a simple phone call. While this solution doesn’t reduce your tax bill, it immediately stops any collection activity, so you don’t have to worry about the IRS garnishing your wages, taking away your property, or taking money from your savings accounts.

4. Check if You’re Eligible for an Offer in Compromise

The offer in compromise is one of the most sought-after options because it reduces your tax bill. If it gets accepted, you no longer have to pay the full balance, and a percentage of your taxes is forgiven. While this sounds like the ideal solution, it isn’t available to everyone. In fact, the majority of offers in compromise get rejected. 

People who believe they are eligible because they won’t be able to pay the full amount without significant financial hardship should discuss this option with a tax professional. Your resolution specialist can help you determine how much you should offer to pay the IRS, and they will fill out the forms correctly, so the chance of acceptance is high.

5. Explore Currently Not Collectible Status

The fresh start program IRS caters to all taxpayers, and there is an option for people who don’t have any spare income. If you’re out of work or you’re just barely getting by, you should explore currently not collectible status, which allows you to delay your payments. 
It’s important to note that this isn’t a permanent solution, and it doesn’t wipe out your debt completely. Instead, you might have to start paying again if your situation changes within the next ten years. 

6. Determine Whether You Can Benefit from Innocent Spouse Relief

Sometimes, people get into tax debt because their spouse makes a mistake or misleads the IRS. For instance, they might not declare all their income or overstate their expenses. When the IRS finds out, the family might have to pay a hefty fine, and they will have to make up for the missed taxes. If you didn’t know about the problem, you are considered an innocent spouse, and you won’t have to pay for your partner’s mistake.

However, it can be hard to prove that you weren’t aware of the issue when it occurred. Therefore, you should always file for innocent spouse relief together with your Louisiana tax resolution specialist. They can make sure you have enough proof and increase your chances of success.

7. Explore Alternative Options

The Fresh Start Program is an excellent way for taxpayers who have a lot of debt to reduce or spread out their payments. However, it isn’t a good choice for everyone. If you earn more than $100,000 as a single person or $200,000 as a couple or if your debt is over $50,000, you might not be eligible. What’s more, the installment agreement might be more expensive than alternative options, such as putting your debt on a credit card or taking out a personal loan.

Together with your tax resolution specialist, you should go through your options to make sure that you are selecting the cheapest way of dealing with your tax bill. If you have good credit and you’ve never missed payments before, you might be eligible for 0% credit cards. These are much cheaper than an installment agreement, so you should consider putting your tax debt on a card and paying it off slowly, without having to worry about interest payments.

Countless American families are struggling to pay their taxes, especially as the cost of living is increasing every month. If you need help, you shouldn’t hesitate to reach out to a Louisiana tax resolution specialist. They can help you gain access to the fresh start program IRS, which is comprised of several options such as the installment agreement and penalty abatement. Contact us at Geaux Tax Resolution to find out more and speak to an expert.