Relaxations in IRS Tax Debt Relief Plans

Last updated on December 27, 2022

The IRS has eased the terms of  certain tax debt payment programs to help taxpayers resolve their tax debt. The IRS’ Fresh Start initiative is an effort to relax some of the restrictions in certain IRS tax debt payment plans. Most of these relaxations involve flexibility in the disclosure of financial information, increasing the maximum threshold for filing for certain payment plans, and making certain tax debt resolution procedures less cumbersome.

Taxpayers should consider IRS’ Fresh Start initiatives in Installment Agreement, Offer in Compromise, and In-Buisness Trust Fund Express Installment Agreement (IBTF-Express IA) when looking to resolve back taxes.

For the Streamlined Offer in Compromise, the IRS will show more flexibility when considering taxpayers’ ability to pay the entire tax debt. It has also limited the number of requests it will make for financial information from taxpayers. If any further requests are required, the IRS is most likely to gather information by phone. More relaxation means less time in reviewing information and qualifying a taxpayer for the payment plan.

For Streamlined Installment Agreement, the filing threshold has been increased to $50,000 from the previous $25,000. The IRS has also limited the information they will require to determine whether a taxpayer qualifies or not.

With less complexity and documentation in the resolution process in many popular payment plans, the Fresh Start initiative will help many taxpayers resolve their IRS tax debt more smoothly.