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For businesses that have gotten into financial tax trouble, the Internal Revenue Service has a program that can aid business owners in cleaning out their debts and getting back to running their companies. Started in 2013, the IRS Fresh Start program  helps businesses deal with tax liens, make easier payments and even settle their tax debts for less than they owe.

Tax liens are government claims on your profits or property due to failure to pay the required taxes. All types of liens will hurt the business credit score of a company. The Fresh Start program helps reduce this risk to credit by increasing the amount that business taxpayers can owe before the IRS will file a Notice of Federal Tax Lien. Although the limit may not apply in all situations, the IRS will generally not file a lien until the business owner owes $10,000 in taxes.

Another way the Fresh Start program helps business credit is by allowing the IRS to withdraw the Notice of Federal Tax Lien as soon as the business owners pays off his or her debts or even before if they are making installment payments. The sooner the liens are removed, the soon the business credit can be rebuilt.

The Fresh Start program also increased access for taxpayers to make streamlined installment payments on their liens. For business owners that owe up to $50,000, they can pay off their debts through direct debit monthly payments for up to 6 years. This agreement does not even require the submission of a financial statement. For those with business tax debts of more than $50,000, installment agreements are still available but they will require financial statements.

And the Fresh Start program even provides for some business owners to settle their tax debts in some situations. The IRS will analyze the owner’s ability to repay the taxes with more leniency than before, giving the opportunity to settle to many more tax-troubled businesses. The settlement will be based on if the IRS feels the lower amount represents “the most the agency can expect to collect within a reasonable period of time.” This will be determined by the business owner’s income and assets, among others. Settling a business tax debt can big a major win for an entrepreneur’s credit and can help a company start putting money back into its operations rather than throwing it all at back-taxes.

While the IRS Fresh Start program cannot solve all business tax debt problems, it down make it easier to resolve the majority of them, helping businesses to shed their debt, improve their credit and move forward again.


Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
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