Question 1

How much can the IRS Fresh Start Program really reduce my tax debt?

Accepted Answer

The savings depend on your specific financial situation, but qualified taxpayers often reduce their debt by 90% or more through an Offer in Compromise. We've helped clients settle $100,000 tax debts for as little as $5,000.The key is proving to the IRS that you genuinely can't pay the full amount without causing severe financial hardship. We analyze your income, necessary living expenses, and asset equity to determine the lowest amount the IRS will accept. If you owe $50,000 or less and meet the other qualification requirements, you have excellent chances of significant debt reduction.Even if you don't qualify for an Offer in Compromise, installment agreements can reduce your monthly payments to as little as $25-50 per month, and penalty abatement can eliminate thousands in fees and interest charges.

Question 2

What happens if I owe more than $50,000 in back taxes?

Accepted Answer

You can still qualify for Fresh Start relief even with larger tax debts. The $50,000 threshold applies to streamlined installment agreements, but there are other options for higher debt amounts.For debts over $50,000, we can negotiate a partial payment installment agreement where you pay based on your actual ability to pay, not the full amount owed. We can also pursue an Offer in Compromise regardless of how much you owe—we've settled million-dollar tax debts for clients who met the financial hardship requirements.Another strategy is making a partial payment to reduce your balance below $50,000, which then qualifies you for the streamlined process. We evaluate every possible angle to find the solution that saves you the most money.

Question 3

Will the IRS stop trying to collect from me once I apply?

Accepted Answer

Yes, the IRS must suspend most collection activities once we submit certain Fresh Start applications on your behalf. This includes stopping wage garnishments, bank levies, and asset seizures in most cases.The moment we file a properly prepared Offer in Compromise, the IRS automatically suspends collection activities while they review your case. This protection typically lasts 6-24 months, giving you breathing room to resolve your situation without constant pressure.For installment agreements, collection activities stop once the IRS accepts your payment plan. Even during the application process, having professional representation often stops aggressive collection tactics because the IRS knows they're dealing with experienced tax professionals who understand their procedures.

Question 4

How long does the Fresh Start Program process typically take?

Accepted Answer

Most Fresh Start cases resolve within 6-18 months, depending on which option you pursue and the complexity of your situation. Installment agreements are usually the fastest, often approved within 30-90 days.Offers in Compromise take longer because the IRS conducts a thorough financial investigation, but the wait is worth it when you can settle a massive tax debt for pennies on the dollar. The IRS has up to 24 months to make a decision, but if they don't respond within that timeframe, your offer is automatically accepted.Penalty abatement requests can be processed in 30-60 days for straightforward cases. Throughout the entire process, you're protected from collection activities, so there's no pressure or stress while we work on your case. We handle all communications with the IRS and keep you updated on our progress.

Question 5

Do I need to have filed all my tax returns to qualify?

Accepted Answer

Yes, you must be current on all required tax filings to qualify for any Fresh Start program. This is non-negotiable—the IRS won't consider relief options until you're compliant with your filing obligations.If you have unfiled returns, we can prepare and file them as part of our service. We often find that clients owe less than they feared once we properly prepare their returns and claim all available deductions and credits they missed.The good news is that getting caught up on filings often triggers automatic penalty relief for first-time filers or those with good compliance history. We've seen cases where simply filing missing returns eliminated most of the penalties, reducing the total debt by 30-50% before we even start negotiating with the IRS.

Question 6

What if I can't afford to pay anything right now?

Accepted Answer

The IRS has a "Currently Not Collectible" status specifically for taxpayers facing genuine financial hardship. If your necessary living expenses exceed your income, the IRS will temporarily suspend all collection activities.To qualify, we document your essential expenses like housing, utilities, food, transportation, and medical costs. If these expenses equal or exceed your income, the IRS places your account in hardship status and stops trying to collect. Your debt doesn't disappear, but collection activities cease until your financial situation improves.This protection can last for years, and in many cases, the statute of limitations expires before the IRS resumes collection, effectively eliminating the debt. Even if your situation improves later, having this breathing room allows you to get back on your feet without the constant pressure of IRS collection activities.

IRS Fresh Start Program Abrahamsville, PA