Question 1

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

Accepted Answer

The reduction depends on your financial situation and which program you qualify for. Offers in Compromise can reduce debt by 90% or more - we've seen $50,000 debts settled for $5,000 or less when the taxpayer truly can't pay the full amount. Penalty abatement typically saves 25-50% of your total balance since penalties often make up a huge chunk of what you owe. Even installment agreements help by stopping additional failure-to-pay penalties once you're in compliance. The IRS can't collect more than you can reasonably afford to pay. That's the whole point of Fresh Start - to get people back into compliance instead of drowning in impossible debt.

Question 2

Do I qualify for the Fresh Start Program with $30,000 in tax debt?

Accepted Answer

Yes, $30,000 puts you well within the qualification range. The streamlined installment agreement option covers debts up to $50,000, and you could potentially pay as little as $400-500 monthly depending on your income and expenses. For Offers in Compromise, the amount you owe isn't the main factor - it's your ability to pay based on your income, expenses, and assets. We've helped people with $30,000 debts settle for $3,000-8,000 when their financial situation supported it. The key qualification factors are being current on tax filings, demonstrating financial hardship if seeking debt reduction, and having a history of trying to stay compliant. Most people with legitimate financial struggles qualify for some form of relief.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

Simple installment agreements can be approved in 30-60 days once we submit complete paperwork. These are the fastest option if you can afford monthly payments but just need time to pay. Offers in Compromise take longer - typically 6-12 months from application to final decision. The IRS has to verify all your financial information and sometimes requests additional documentation. But collection activity stops while your offer is being reviewed. Currently Not Collectible status can be granted quickly, sometimes within weeks, when financial hardship is clear. The timeline really depends on which program fits your situation and how quickly we can gather the required documentation.

Question 4

Will the IRS Fresh Start Program stop wage garnishment immediately?

Accepted Answer

Yes, but the timing depends on where you are in the collection process. If garnishment hasn't started yet, entering any Fresh Start program typically prevents it from happening. The IRS generally won't start new collection actions while you're actively working on a resolution. If garnishment has already begun, we can request an immediate release by showing you're pursuing Fresh Start options in good faith. Most IRS agents will agree to stop garnishment once they see you're serious about resolving the debt through proper channels. The key is acting before things get to the garnishment stage. Once we file paperwork for installment agreements or offers in compromise, you get breathing room to work out a solution without the IRS taking your paycheck every week.

Question 5

Can I apply for Fresh Start if I haven't filed tax returns?

Accepted Answer

You must file all required returns before the IRS will consider any Fresh Start application. This is non-negotiable - they won't negotiate payment terms on debt they can't calculate because returns are missing. The good news is we can prepare and file those missing returns quickly, often within 2-3 weeks. We'll calculate the lowest legal tax liability and get everything filed properly. Then we can immediately move forward with Fresh Start applications. Don't let unfiled returns scare you away from getting help. The IRS actually prefers when people come forward voluntarily to file missing returns rather than waiting for them to file substitute returns with higher tax amounts. It shows good faith effort to get compliant.

Question 6

What happens if my Fresh Start Program application gets denied?

Accepted Answer

Denials aren't the end of the road - they're usually fixable problems. Most denials happen because of incomplete financial information, mathematical errors, or applying for the wrong type of relief. We can address these issues and resubmit. If an Offer in Compromise gets rejected, we can appeal the decision or modify the offer amount based on the IRS feedback. Sometimes they'll counter-offer with terms that are still better than paying the full amount. For installment agreement denials, it's usually because the proposed payment was too low. We can revise the payment amount or provide additional financial documentation to support a lower payment. The IRS wants to collect something rather than nothing, so persistence usually pays off.

IRS Fresh Start Program Angels, PA