Navigating Tax Challenges as a Startup: How the IRS Fresh Start Program Can Help

In the modern world, there are only two things you can be certain of—- Death and Taxes. What happens when you are not capable of paying your taxes on time because you are too busy running a startup? Does the incapability of paying your taxes on time means high fees, serious penalties, and arrest? 

Fortunately for you, the answer is “no” because the US government has your back. 

Starting your own business is an exciting venture filled with potential growth and success, but facing tax obligations while trying to keep your new business afloat can be challenging. During this time of struggle, the Fresh Start Program can as a relief to struggling taxpayers, Startups being the prime example.

In today’s article, we delve into the world of the Fresh Start Program, what it means, and how it can help you navigate the world of startup, and tax payments. 

IRS Fresh Start Program

Starting a business is an exciting venture filled with dreams of growth, innovation, and success. However, it also comes with its share of challenges, not the least of which are tax-related issues. Navigating the complexities of tax obligations can be daunting for startups, especially when financial resources are limited and every dollar counts. Fortunately, the Fresh Start Program IRS offers hope for startups struggling with tax debts, providing a pathway to overcome financial hurdles and focus on business growth.

Fresh Start Initiative is a series of tax relief programs offered by the IRS to help citizens who are dealing with large tax debts. These initiatives include payment plans, streamlined procedures for filing taxes, and more. This tax relief program can immensely help a startup business, especially during their initial years when the finances are limited, but expenses unlimited. 

IRS i.e. Internal Revenue Services handles tax and financial operations in the USA, the Fresh Start program was introduced to relieve taxpayers from the massive tax burdens that may have a negative influence on their lives, and their living costs. This is a great initiative for those who are unable to pay the annual payments to the government. Fresh Start Initiative IRS offers a plenty of benefits, some include: 

  • Prevention of tax liens being filed against a taxpayer.
  • In some cases removal of a tax lien that has already been placed
  • Reduction in penalties and interest on penalty
  • No requirement to disclose income or assets to the IRS, which for some taxpayers will yield a more affordable installment plan.

IRS Fresh Start Program: Payment Plans 

The two main types of payment options offered by Fresh Start Program are as follows: 

  1. Streamline Installment Plans

This payment plan allows taxpayers to pay their taxes over a period of time, usually up to 72 months to 84 months. This can be highly beneficial for entrepreneurs who have recently started a business as this gives them time to properly manage their expenses without worrying about paying their taxes at the end of the financial year. 

  1. Partial Payment Plans

Partial payment plans allow the taxpayers to pay the amount owed in small installments. Therefore, instead of paying all your taxes at the end of the year, you can make monthly payments to the government. This can help startups to avoid incurring large tax liability towards the government which they are unable to pay. 

Along with these payment options, the program also offers several other payment relief options that are available to taxpayers. 

  1. Offer in Compromise (OIC)
  2. Installment Agreements (IA)
  3.  Currently Non-Collectible
  4.  Penalty Abatement
  5.  Innocent Spouse Relief

How to Apply for the IRS Fresh Start Program?

If you are also struggling with running your business as well as navigating your tax payments, here’s how you can apply for the IRS Fresh Start Program. 

  • To start the application process, visit IRS official website irs.gov. 
  • Once you are on the official website, log in using your Tax ID and your password. 
  • Look for the search bar, and in the space provided enter, “Find the Fresh Start Program,” and then press search. 
  • A new prompt will appear on your screen asking you to agree to their terms and conditions, to proceed, click on Accept.  
  • Complete the IRS Fresh Start Application form by adding the necessary information and submitting it.
  • Once you have added all the necessary information, all you have to do is wait for the approval. It may take a while, so stay put. 

IRS Fresh Start Program Eligibility

There are no income requirements when it comes to “Who” can apply for the program. The IRS aims to help any and every taxpayer who owes taxes and is struggling to pay them with this initiative. However, there are certain eligibility standards which must be met to qualify for the program, and those include: 

  • First of all, you can only apply for the program if you are a citizen and taxpayer in the USA. 
  • You can Apply for this program if you have a decrease in your Annual Income of 25% or more.
  • When you apply, your yearly income can’t be more than $100,000 if you’re single and $200,000 if you’re married.
  • Your Tax Due or Tax Debt must be less than $50,000 and then only you can apply for this program.
  • You must agree to pay your taxes owed within six years.

If you meet the above-mentioned criteria, only then you are eligible to apply for the Fresh Start program. 

Conclusion 

Fresh Start Program is the perfect tool for startups, it not only offers you tax relief, but flexibility regarding how you want to make tax payments. This program helps entrepreneurs to allocate their financial resources towards innovation, expansion, and overall business success, instead of fretting about taxes. 

In the ever-evolving, and demanding startup world, a Program like this can help entrepreneurs navigate the complexities of taxation, and reclaim control over your business. 

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