If you owe money to the Internal Revenue Service (IRS) but can't afford to pay it off immediately, that delinquent tax debt can end up having a big impact on your financial health. After all, the IRS has lots of tools at its disposal to recoup the money owed, and over time, you may find yourself facing big penalties as your tax debt accumulates interest — including things like wage garnishments or tax liens. If that happens, it could be a significant hit to your financial well-being.
Main Idea: The IRS Fresh Start program gives taxpayers with back taxes more flexible ways to pay, settle debt, and reduce the risk of tax liens.
Key Points:
Tax debt can lead to wage garnishment, liens, and growing interest, which can hurt household finances and small businesses.
IRS Fresh Start can give some taxpayers payment plans, penalty relief, and a chance to avoid or remove tax liens.
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Central agency administering the Fresh Start program and tax collection tools discussed throughout the article.
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