Question 1

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

Accepted Answer

Qualification depends on several factors, but most taxpayers with debt under $50,000 can access at least some Fresh Start benefits. For installment agreements, you need to owe less than $50,000 in combined tax, penalties, and interest, and be able to pay the full amount within 72 months. Offer in Compromise qualification is more complex and based on your ability to pay, income, expenses, and asset equity. The IRS uses a formula to determine if you can pay your full debt within the remaining collection period. If not, you may qualify to settle for less. The best way to know for certain is to have your specific situation evaluated by a tax professional who understands the current IRS guidelines and can assess your eligibility accurately.

Question 2

How long does the Fresh Start Program application process take?

Accepted Answer

Timeline varies depending on which program you're applying for and how complex your case is. Installment agreements are typically the fastest, often approved within 30-60 days if you meet the streamlined criteria. Offers in Compromise take longer—usually 6-12 months from submission to final decision. The IRS needs time to review your financial information thoroughly and may request additional documentation during the process. Currently-Not-Collectible status can be granted relatively quickly if your financial hardship is clear and well-documented. Penalty abatement requests vary widely depending on the circumstances and the amount of penalties involved. Having professional representation often speeds up the process because submissions are complete and accurate from the start.

Question 3

What happens if the IRS rejects my Fresh Start application?

Accepted Answer

Rejection doesn't mean you're out of options. Often, applications are rejected for technical reasons that can be corrected and resubmitted. Sometimes the IRS needs additional documentation or clarification about your financial situation. If your Offer in Compromise is rejected, you have the right to appeal the decision or submit a new offer with different terms. Many successful settlements happen on the second or third attempt after addressing the IRS's initial concerns. For installment agreements, rejection usually means the payment amount or term length needs adjustment. The IRS will often counter with different terms that work within their guidelines. The key is having experienced representation that knows how to navigate these negotiations and present your case in the strongest possible light.

Question 4

Can the IRS still garnish my wages while my application is pending?

Accepted Answer

Generally, the IRS must pause most collection activities while your application is being reviewed. This includes wage garnishments, bank levies, and asset seizures. However, this protection isn't automatic—it depends on which program you're applying for and whether you meet certain requirements. For Offers in Compromise, collection activity stops once your application is accepted for processing, provided you're making required payments and staying current with new tax obligations. Installment agreement applications also typically halt collection, especially if you're making proposed payments while waiting for approval. The protection continues during any appeal process if your initial application is rejected. This breathing room is one of the major benefits of the Fresh Start Program—it gives you time to resolve your situation without the constant pressure of IRS collection actions.

Question 5

Will participating in the Fresh Start Program affect my credit score?

Accepted Answer

The Fresh Start Program itself doesn't directly impact your credit score, but resolving your tax debt can actually improve your credit situation over time. Tax liens, which severely damage credit scores, can be withdrawn once you enter certain payment agreements or settle your debt. Under Fresh Start guidelines, the IRS will withdraw liens for installment agreements where the balance falls below $25,000, and they'll consider lien withdrawal for larger debts in some circumstances. Once withdrawn, the lien is removed from your credit report entirely. Successfully completing an Offer in Compromise also results in lien release and withdrawal. While the tax debt resolution may appear on your credit report initially, having the matter resolved is much better for your credit than ongoing collection activity and unpaid tax liens.

Question 6

Should I try to negotiate with the IRS myself or hire a professional?

Accepted Answer

You have the legal right to represent yourself with the IRS, but tax resolution is complex and mistakes can be costly. The IRS agents you'll deal with are trained professionals who negotiate these cases daily—they know every rule, exception, and requirement. Professional representation levels the playing field. Tax attorneys and enrolled agents understand IRS procedures, know which arguments work, and can present your case in the most favorable light. We also handle all communication with the IRS, so you don't have to deal with collection agents directly. Would you go to court without a lawyer? Of course not. Then why would you go before the IRS without a trusted tax professional? The stakes are too high and the rules too complex to navigate alone. Professional fees are often a fraction of what you'll save through proper representation and negotiation.

IRS Fresh Start Program Birchtown, PA