Question 1

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

Accepted Answer

Qualification depends on your specific tax debt amount, financial situation, and compliance history. Most taxpayers with back taxes can benefit from at least one Fresh Start option. For streamlined installment agreements, you need to owe $50,000 or less and be current on all tax filings. Offers in Compromise require demonstrating that you cannot pay the full amount based on your income, expenses, and asset equity. Penalty abatement typically requires showing reasonable cause for late filing or payment, such as illness, natural disaster, or other circumstances beyond your control. The key is having all your tax returns filed and providing complete financial documentation. We evaluate your eligibility during your free consultation and recommend the option most likely to succeed based on current IRS guidelines.

Question 2

What's the difference between an installment agreement and offer in compromise?

Accepted Answer

An installment agreement lets you pay your full tax debt over time through monthly payments, while an Offer in Compromise can reduce the total amount you owe. Installment agreements work well if you can afford monthly payments but need time to pay off the debt. The IRS typically approves these quickly, especially under the streamlined process for debts under $50,000. You'll pay the full amount plus interest, but you avoid collection actions like wage garnishment or bank levies. An Offer in Compromise requires proving you cannot pay the full debt based on your financial situation. The IRS accepts these when the offered amount represents your maximum collection potential. This process takes longer and requires extensive financial documentation, but successful offers can reduce debt by 90% or more.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

Timeline varies significantly based on which Fresh Start option you pursue and how quickly you provide required documentation. Streamlined installment agreements typically process within 30-60 days once submitted with complete information. Standard installment agreements requiring financial review can take 90-120 days. Currently Not Collectible determinations usually process within 60-90 days. Offers in Compromise take the longest—typically 6-12 months from submission to final decision. The IRS must thoroughly review your financial situation, and they often request additional documentation during the process. Penalty abatement requests vary widely, from 30 days for simple cases to several months for complex situations requiring detailed documentation.

Question 4

Will the IRS stop collection activities while my application is pending?

Accepted Answer

Yes, most Fresh Start applications trigger an automatic stay of collection activities, but the rules vary by program type. Installment agreement applications stop levy actions while pending, but the IRS can still file new liens. Offers in Compromise provide broader protection—the IRS cannot levy your assets or income while they review your offer, and they cannot file new liens in most cases. Currently Not Collectible applications also stop active collection, though existing liens remain in place. Penalty abatement requests don't automatically stop collection of the underlying tax debt, only the penalties being disputed. It's crucial to submit applications correctly and maintain any required payments to keep these protections in place.

Question 5

Can I apply for Fresh Start relief if I have unfiled tax returns?

Accepted Answer

You must file all required tax returns before the IRS will consider most Fresh Start applications, but there are strategic ways to handle this requirement. The IRS typically requires three years of filed returns for installment agreements and six years for Offers in Compromise. If you have unfiled returns, we can prepare and submit them as part of your overall resolution strategy. Sometimes filing these returns actually reduces your total debt if you're entitled to refunds or credits. For Currently Not Collectible status, the IRS usually wants current year returns filed but may be flexible on older years depending on your financial situation. The key is addressing unfiled returns strategically—sometimes it makes sense to file them all at once, other times we recommend a phased approach based on your specific circumstances.

Question 6

What happens if the IRS rejects my Fresh Start application?

Accepted Answer

Rejection doesn't end your options—it usually means we need to try a different approach or address specific issues the IRS identified. If an installment agreement gets rejected, it's often because the proposed payment amount was too low or financial information was incomplete. We can resubmit with corrections or explore other payment options. Offer in Compromise rejections typically involve disagreements about your ability to pay—we can appeal the decision or submit a new offer with different terms. Currently Not Collectible rejections usually mean the IRS believes you have more income available than claimed. We can provide additional documentation or appeal their determination. The important thing is having experienced representation who knows how to address IRS concerns and present your case effectively.

IRS Fresh Start Program East Rush, PA