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. Self-employed individuals need to show a 25% or greater decline in income. The key is being current on filings—the IRS won't grant relief if you have unfiled returns. Even if you can't pay, you must file. We help clients get caught up on unfiled returns as the first step toward Fresh Start eligibility. Your ability to pay matters more than the exact amount you owe. The IRS looks at your monthly income versus necessary living expenses. If paying your full tax debt would create genuine financial hardship, you have a stronger case for relief.

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—up to 72 months for debts under $50,000. You pay everything you owe, just in manageable monthly payments. The IRS typically approves these if you can demonstrate ability to make consistent payments. An Offer in Compromise actually reduces what you owe. If approved, you pay less than the full amount and the IRS forgives the rest. But the IRS only accepts offers when they believe it's the most they can realistically collect from you. Most people start with installment agreements because they're easier to qualify for. If your financial situation is severe enough that even small monthly payments would cause hardship, then an Offer in Compromise might be the better path. We analyze your specific situation to recommend the right approach.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

Installment agreements typically process within 30-60 days if all paperwork is complete and accurate. The IRS has streamlined these for debts under $50,000, requiring less financial documentation than in the past. Offers in Compromise take much longer—usually 6-12 months for a final decision. The IRS scrutinizes these applications carefully because they're agreeing to accept less than you owe. They verify your financial information, may request additional documentation, and sometimes conduct field visits. Currently-Not-Collectible status can be granted relatively quickly if you clearly demonstrate financial hardship. However, the IRS reviews these cases periodically, so it's typically a temporary solution while you work toward a more permanent resolution.

Question 4

Will the IRS stop trying to collect from me while my application is pending?

Accepted Answer

Yes, in most cases. Once you submit a complete Fresh Start application, the IRS generally suspends most collection activities while they review your case. This includes stopping wage garnishments, bank levies, and new collection notices. However, they don't stop penalties and interest from accruing during this time. That's why it's crucial to act quickly and get your application submitted correctly the first time. Rejected applications mean collection activities resume, often more aggressively than before. If you're already facing immediate collection action—like a scheduled wage garnishment—we can often get emergency relief while preparing your Fresh Start application. The key is having professional representation who knows how to communicate with IRS collection personnel effectively.

Question 5

What happens if I miss payments on my installment agreement?

Accepted Answer

Missing payments can default your entire agreement, causing all collection activities to resume immediately. The IRS considers the agreement broken and your full balance becomes due. They can then proceed with wage garnishments, bank levies, or other collection actions. Most agreements allow for one missed payment if you catch up within 30 days. But repeated missed payments or failure to make up the shortage will definitely result in default. That's why we recommend setting up automatic payments through direct debit—it helps prevent accidental missed payments. If you default, you can sometimes get reinstated, but it's not guaranteed. The IRS may require a new financial review or additional terms. It's much better to contact them immediately if you're having trouble making payments rather than just missing them and hoping they don't notice.

Question 6

Can I handle the Fresh Start Program application myself without professional help?

Accepted Answer

Technically yes, but it's risky. The IRS provides forms and instructions, but they don't provide strategy or advocacy. Most people who try to handle Fresh Start applications alone make critical mistakes that result in rejection or unfavorable terms. Common errors include underreporting income, failing to properly document expenses, choosing the wrong relief option, or missing crucial deadlines. The IRS doesn't give second chances easily—if your application is rejected, it's much harder to get approved on a subsequent attempt. Professional representation means someone who knows how to present your financial situation in the most favorable light while staying completely honest. We know which expenses the IRS accepts, how to document hardship effectively, and what triggers closer scrutiny. The cost of professional help is typically far less than the money saved through better outcomes.

IRS Fresh Start Program Easton Anglers, PA