Question 1

How do I know if I qualify for the IRS Fresh Start Program?

Accepted Answer

You may qualify if you owe $50,000 or less in combined taxes, penalties, and interest, are current on all required tax filings, and can demonstrate financial hardship or inability to pay the debt in full. Self-employed individuals need to show a 25% or more drop in income to qualify for certain benefits.The program has specific requirements that vary depending on which relief option you pursue. Installment agreements, Offers in Compromise, penalty abatement, and lien withdrawal each have different criteria. We evaluate your situation during our free consultation to determine exactly which programs you qualify for and which offers your best outcome.Don't assume you don't qualify based on income alone. The IRS considers your entire financial picture including necessary living expenses, asset equity, and future earning potential. Many Arrowhead Lake residents who thought they made too much money actually qualified for significant relief.

Question 2

Can the Fresh Start Program really reduce my tax debt by 90%?

Accepted Answer

Yes, but only through an Offer in Compromise if you meet strict financial criteria. The IRS will accept less than you owe if paying the full amount would create genuine financial hardship or if collection would be unlikely due to your financial situation.The 90% reduction figure comes from successful Offer in Compromise cases, but it's not automatic or guaranteed for everyone. The IRS calculates your "reasonable collection potential" based on your income, expenses, and asset equity. If that amount is significantly less than what you owe, you may qualify for substantial debt reduction.Most taxpayers benefit more from installment agreements or penalty abatement. These options might not reduce your principal tax debt as dramatically, but they're much easier to qualify for and can still save thousands in penalties and interest. We'll show you realistic expectations for your specific situation during your consultation.

Question 3

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

Accepted Answer

Collection actions typically pause once we establish representation and begin the application process, but this varies by program type. Offers in Compromise automatically trigger a collection hold while under review. Installment agreement applications usually stop aggressive collection, though the IRS may continue sending notices.The key is acting quickly and working with professionals who know how to properly request collection holds. We immediately contact the IRS upon taking your case and request appropriate collection protection. This stops wage garnishments, bank levies, and asset seizures in most cases.However, the IRS won't wait forever. If your application is rejected or you default on an agreement, collection actions resume with added penalties. That's why proper preparation and realistic applications are crucial. We ensure your application meets IRS standards and has the highest chance of approval.

Question 4

How long does the Fresh Start Program application process take?

Accepted Answer

Installment agreements typically process within 30-60 days if all documentation is complete and accurate. Simple cases with straightforward financial situations move faster, while complex cases involving multiple tax years or business debts take longer.Offers in Compromise take 6-12 months on average, sometimes longer for complicated cases. The IRS thoroughly reviews your financial information, may request additional documentation, and sometimes requires updated financial statements if your situation changes during review.Currently Not Collectible status can be granted relatively quickly, often within 30-45 days, since it's temporary relief rather than permanent resolution. Penalty abatement requests vary widely depending on the reason for abatement and the amount of penalties involved. We track all applications and keep you updated throughout the process.

Question 5

What happens if I miss payments on my Fresh Start installment agreement?

Accepted Answer

Missing payments can cause your agreement to default, which reinstates all original penalties, interest, and collection actions. The IRS typically allows one missed payment before declaring default, but this isn't guaranteed. Once in default, you lose Fresh Start Program protection and face immediate collection enforcement.The good news is that defaulted agreements can often be reinstated if you act quickly and can demonstrate the missed payment was due to circumstances beyond your control. We help clients set up direct debit payments to avoid accidental defaults and provide guidance if payment problems arise.Prevention is always better than cure. We work with you to establish realistic payment amounts that fit your actual budget, not what you hope you can afford. If your financial situation changes after setting up an agreement, contact us immediately. The IRS offers modification options that are much easier to obtain than reinstating a defaulted agreement.

Question 6

Why should I hire a tax professional instead of applying myself?

Accepted Answer

The IRS Fresh Start Program has specific requirements, complex forms, and detailed financial disclosures that must be completed perfectly. One mistake can result in rejection, wasted time, and continued collection actions. Professional representation significantly increases your chances of approval and optimal outcomes.We know which program offers your best result based on your specific situation. Many taxpayers apply for Offers in Compromise when installment agreements would be faster and more appropriate. Others miss penalty abatement opportunities that could save thousands. We ensure you pursue the right strategy from the start.The IRS treats represented taxpayers differently. When we contact them on your behalf, collection actions typically stop immediately. IRS agents know we understand the process and are more willing to negotiate reasonable terms. You also get attorney-client privilege protection and professional advocacy throughout the entire process. The cost of professional help is usually far less than the money we save you through proper negotiation.

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IRS Fresh Start Program Arrowhead Lake, PA