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'Fresh Start' Tax Amnesty Program Gets a Boost From the IRS

In previous posts we have discussed the "Fresh Start" amnesty program. It is an amnesty program offered by the Texas Comptroller's Office and is designed for taxpayers that owe taxes which have not yet been paid, as well as for taxpayers who have not filed tax returns.

The Internal Revenue Service is offering a boost to its "Fresh Start" program by offering additional time limits through its Offer in Compromise process. Coupled with the Texas "Fresh Start" program, the tax law changes could help more individuals and small businesses come into compliance after they may have weathered financial and economic difficulties.

An Offer in Compromise, or OIC, is an agreement that is made between the IRS and the taxpayer that settles the tax liability for an amount less than the total that is owed.

The IRS OIC changes include:

  • Revising calculations used for future income
  • Allowing taxpayers to repay student loans
  • Allowing taxpayers to pay state and local delinquent taxes through OIC
  • Expanding the Allowable Living Expense amount

These two "Fresh Start" programs apply to different types of taxes, but may apply to the same individual, such as a sole-proprietor.

The Texas "Fresh Start" amnesty program is for any taxes that are required to be collected on behalf of the state. State and local taxes and fees administered by the Comptroller's office are eligible. Property taxes are not eligible.

The IRS' "Fresh Start" amnesty program is for personal income taxes.

If you find this confusing, you may not be alone. Tax matters do not tend to go away with time, but are best faced head on with the assistance of a professional representative. To learn more about the Texas "Fresh Start" amnesty program, you may wish to contact a tax attorney.

Source: "ArkLaTex, "IRS announces more flexible terms for struggling taxpayers," Nancy Cook, May 30, 2012

Source: Texas Comptroller's Office, "Fresh Start Texas Taxpayer Amnesty Program 2012," May 4, 2012

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