Economic impact payments, early child tax credit payments, and more are part of your coronavirus relief. The IRS Fresh Start Program is another term for the agency's various debt forgiveness options. It's often called a “fresh start” because taxpayers are often exempt from burdensome penalties, interest payments, and more when seeking real relief from the IRS. An IRS Fresh Start compromise offer, or OIC, is an agreement that allows taxpayers to resolve their tax debt for less than the full amount they owe.
Although married taxpayers meet the income requirements to apply for tax forgiveness when one spouse is dependent on another person's federal income tax return, they cannot jointly apply for tax forgiveness. If there were a Debt Forgiveness Act that IRS agents could follow, it would be much easier to answer this question. If you try to apply for the IRS Fresh Start Initiative on your own, the IRS will try to get you to accept the terms that are most favorable to them. 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.
Tax experts have a skillful understanding of the requirements of the IRS Fresh Start Program and will not be intimidated or deceived by the IRS into coming to an optimal resolution. They are not required to file an individual PA-40 income tax return, but they would qualify for tax forgiveness if required to file one and are also eligible for tax forgiveness. The IRS requires that you be up to date with all tax returns before you are considered for the Fresh Start program. Considering the various debt forgiveness options offered by the IRS is a good idea if you owe them an amount of money.
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. The program has many stipulations and you must be prepared to show them that you are fully qualified for the OIC program or you will not be accepted. One disadvantage is that the IRS will continue to apply interest to your total debt, even if the amount you must pay each month changes according to the Fresh Start Program. The IRS will not accept a request for tax relief through any of the Fresh Start Initiative programs without sufficient evidence.
That fee may be higher than what you end up saving on your tax bill if the IRS accepts your transaction offer (and may not be refundable if the IRS rejects your offer). A dependent child may be eligible to apply for tax forgiveness only if they are a dependent of Schedule SP PA-40 of their parents, grandparents, or adoptive parents and the child's parents, grandparents, or adoptive parents are eligible for tax forgiveness.