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In 2012 the IRS announced a fresh start initiative. Here’s what you want to know about it.

First of all they made available a streamlined installment agreement for taxpayers. The big benefit of the streamlined installment agreement is that you do not have to fill out a collection information statement. In other words the IRS will not go digging into your financial life. There are rules and limitations on who can qualify for a streamlined Installment agreement. It is generally only available to taxpayers who $50,000 or less.

The second part of the fresh start initiative is terrific. If a taxpayer enters into a streamlined installment agreement and makes the first three payments using the direct debit option ( which means the service will automatically remove the money from your bank account). Then the IRS will remove your Federal tax lien. This is obviously a huge benefit for most taxpayers. For those of you who don’t know,when the IRS files a federal tax lien against you, it files that lien at your local courthouse. That lien then shows up on your credit report making it much harder to get a loan of any type.