You can also apply for the IRS debt forgiveness program if you are self-employed and have suffered a loss of income of at least 25%. The IRS Fresh Start program helps taxpayers who owe the IRS. Under certain circumstances, taxpayers can have their federal tax debt partially forgiven. When the IRS considers waiving the tax debt, the taxpayer's financial situation is a primary criterion.
Basically, the IRS can't collect more than a taxpayer can afford. Even the IRS understands that life happens. That's why the government offers IRS debt forgiveness when you can't pay your tax debt. When the IRS considers forgiving your tax liability, it first analyzes your current financial situation.
To make it easier for taxpayers to qualify for the Tax Debt Forgiveness Program, the IRS has expanded its Fresh Start initiative. This program does not have a guaranteed acceptance policy and it is entirely up to the IRS to offer it to any qualifying taxpayer. Understanding your tax debt and dealing with the IRS isn't easy to do alone, even with available programs like Fresh Start. Under the new flexible IRS rules, taxpayers don't have to disclose extensive financial details to the IRS to qualify their ability to pay.
Since then, the IRS has expanded the program in the hope of helping more taxpayers who have federal tax debts. This type of program was designed as a way for the IRS to maximize the collection of the amount of tax money owed to the government and, at the same time, make it much less painful for the taxpayer. Programs like this allow taxpayers who owe back taxes to the IRS or who have a debt to the IRS to settle a smaller amount. There are strict qualification requirements for an OCI and not everyone who owes thousands of dollars to the IRS will qualify for the program.
If you're on the wrong side of the IRS, you might be lucky if you qualify for their IRS tax forgiveness program. The addition of these programs to the tax code indicated to many that the IRS sought to be a little more flexible in how to recover more money owed to the government. If you can't pay but haven't contacted the IRS for a waiver or help, you should still wait for them to start taking collection measures against you. Knowing your current position with respect to your tax debt is vital when it comes to seeking forgiveness from the IRS.
If you are concerned that you may not qualify for an OIC, consult a tax professional to see what IRS forgiveness options might be available to you.