Question 1

Do I qualify for the IRS Fresh Start Program with $35,000 in tax debt?

Accepted Answer

Yes, you likely qualify. The Fresh Start Program is available for taxpayers owing $50,000 or less in combined taxes, penalties, and interest. But qualification depends on more than just the amount you owe. You must be current on all required tax filings. If you haven't filed returns for the years you owe taxes, we need to get those filed first. You also need to demonstrate financial hardship or show that paying the full amount would create significant difficulty. The IRS looks at your income, expenses, assets, and ability to pay over time. Even if you owe $35,000, if you can afford to pay it through normal collection methods, they might not approve an Offer in Compromise. That's why professional evaluation is crucial—we know how to present your case in the best possible light.

Question 2

How long does the Fresh Start Program application process take?

Accepted Answer

The timeline varies depending on which option you pursue, but expect 3-8 months for most cases. Installment agreements are fastest—often approved within 30-60 days if you owe less than $50,000 and can pay within 72 months. Offers in Compromise take longer, typically 6-8 months from application to final decision. The IRS has up to two years to make a determination, but most cases resolve much faster with professional representation. Currently Not Collectible status can be granted relatively quickly—sometimes within 30 days—if you clearly demonstrate financial hardship. Penalty abatement requests vary widely, from a few weeks for simple cases to several months for complex situations. The key is having all your documentation ready and presenting your case correctly the first time.

Question 3

Can the Fresh Start Program help with Pennsylvania state taxes too?

Accepted Answer

The IRS Fresh Start Program specifically addresses federal tax debt, but similar relief options exist for Pennsylvania state taxes. We handle both federal and state tax problems, often simultaneously. Pennsylvania offers installment agreements, penalty waivers, and sometimes accepts offers in compromise for state tax debt. The Pennsylvania Department of Revenue has its own hardship programs and collection procedures, which are often more flexible than federal guidelines. Since you're dealing with both federal and state obligations, it's crucial to coordinate your approach. Resolving federal debt while ignoring state taxes, or vice versa, can create new problems. We develop comprehensive strategies that address your entire tax situation, not just the federal portion. This approach prevents you from solving one problem only to have another agency start collection actions.

Question 4

What happens if the IRS rejects my Fresh Start Program application?

Accepted Answer

Rejection isn't the end of the road—it's often just the beginning of negotiations. The IRS provides specific reasons for denial, which gives us a roadmap for resubmission or alternative approaches. If your Offer in Compromise gets rejected, we can appeal the decision within 30 days or submit a new offer addressing their concerns. Sometimes it's a matter of providing additional documentation or adjusting the offer amount based on their feedback. If one Fresh Start option doesn't work, others might. Maybe you don't qualify for an Offer in Compromise but can get a manageable installment agreement. Perhaps penalty abatement can reduce your balance enough to make full payment feasible. We don't give up after one "no"—we find another path forward. The IRS wants to collect something rather than nothing, so there's almost always a solution that works for both sides.

Question 5

Will applying for the Fresh Start Program stop IRS collection actions?

Accepted Answer

Yes, but only while your application is being processed and only for certain programs. When you submit an Offer in Compromise, the IRS typically suspends most collection activities, including levies and seizures, while they review your case. Installment agreement applications also provide some protection. Once you're accepted into a payment plan, collection actions stop as long as you make your payments on time. Currently Not Collectible status completely halts collection activities until your financial situation improves. However, the IRS won't stop accruing interest and penalties during the application process. Time is critical—the sooner you apply, the sooner you get protection. If you're facing immediate collection action like a bank levy or asset seizure, we can often get emergency protection while preparing your formal application. Don't wait until they've already taken your property to seek help.

Question 6

How much does it cost to get help with the Fresh Start Program?

Accepted Answer

Our consultation fee is fully credited toward your resolution work if you engage our services. This means you're not paying twice—the consultation investment becomes part of your total fee structure. Fees vary based on the complexity of your case and which resolution option we pursue. Simple installment agreements cost less than complex Offers in Compromise. Cases involving multiple tax years, business entities, or significant assets require more work and carry higher fees. We're transparent about costs upfront. No surprise bills, no hidden charges. You'll know exactly what you're paying and what you're getting before we start work. Many clients find that our fees are far less than the penalties and interest they'd pay without professional help. When you consider the potential savings—sometimes 90% or more of your tax debt—professional representation often pays for itself many times over.

IRS Fresh Start Program Delaware Water Gap, PA