Question 1

How much can the IRS Fresh Start Program actually reduce my tax debt?

Accepted Answer

The reduction depends on your financial situation, but eligible taxpayers may reduce their debt by 90% or more through an Offer in Compromise. This isn't automatic—the IRS evaluates your income, expenses, and assets to determine what you can reasonably pay. For payment plans, you're not reducing the total amount, but you're spreading it over up to 72 months with no additional penalties once you're in the program. Many clients find this alone makes their debt manageable. The key is having someone who knows how to present your case correctly. Most offers get rejected because they're not formatted properly or don't include required documentation.

Question 2

Do I qualify for the Fresh Start Program if I owe more than $50,000?

Accepted Answer

You can still qualify, but you'll need to pay down your balance to $50,000 first. This might sound impossible, but there are strategies to make this work. Sometimes penalty abatement alone can bring your balance under the threshold. Other times, partial payments combined with penalty relief get you there. The $50,000 limit applies to your total tax debt including penalties and interest, not just the original tax owed. Even if you can't get under $50,000 immediately, other Fresh Start options might still apply. Currently Not Collectible status doesn't have a debt limit, and neither does penalty abatement for reasonable cause.

Question 3

Will the Fresh Start Program stop IRS collection actions against me?

Accepted Answer

Yes, once you're accepted into most Fresh Start programs, collection actions stop. This includes wage garnishments, bank levies, and new tax liens. The IRS can't take your paycheck while you're making payments under an approved installment agreement. However, you need to stay current on your agreement and file all future returns on time. If you default on your payment plan, collection actions can resume. The protection starts as soon as you're accepted, not when you apply. This is why having professional representation matters—we know how to get your application processed quickly and correctly the first time.

Question 4

How long does the Fresh Start Program application process take in Pennsylvania?

Accepted Answer

For streamlined installment agreements under $50,000, approval can happen within a few weeks. Offers in Compromise take longer—typically 6 to 12 months for the IRS to make a decision. Pennsylvania residents don't face longer processing times than other states, but having local representation can speed things up. Tax professionals who regularly work with Pennsylvania IRS offices know which officers handle cases efficiently and which ones need extra documentation. The 2025 updates include online applications for Offers in Compromise, which should reduce processing time. But the application still needs to be perfect, or you'll face delays and potential rejection.

Question 5

What happens if the IRS rejects my Fresh Start application?

Accepted Answer

Rejection doesn't mean you're out of options. Most rejections happen because of incomplete documentation or incorrect financial calculations, not because you don't qualify. With professional representation, you can appeal the rejection or resubmit with corrections. Sometimes the IRS will suggest an alternative program that works better for your situation. If your Offer in Compromise gets rejected, you might still qualify for a payment plan. If your payment plan gets rejected, you might qualify for Currently Not Collectible status. The key is having someone who knows all the options and can pivot quickly.

Question 6

Can I apply for the Fresh Start Program myself without hiring a tax professional?

Accepted Answer

Technically yes, but it's risky. The IRS doesn't provide the forms with instructions that actually make sense, and one mistake can mean starting over or permanent rejection. Think about it this way: would you go to court without a lawyer? The IRS has teams of attorneys and agents whose job is protecting government revenue. You're negotiating against professionals who do this every day. The consultation fee gets credited toward your resolution work if you decide to hire representation. So you're not paying extra for professional help—you're just paying it upfront instead of after you've already made costly mistakes on your own.

IRS Fresh Start Program Equinunk, PA