Question 1

What is the IRS Fresh Start Program and do I qualify?

Accepted Answer

The IRS Fresh Start Program is a collection of tax relief policies that make it easier to resolve tax debt through installment agreements, Offers in Compromise, and penalty relief. You may qualify if you owe $50,000 or less in combined tax, penalties, and interest, are current on all required tax filings, and can demonstrate financial hardship or inability to pay the full amount. Self-employed individuals may qualify with a 25% or greater drop in income. The program expanded eligibility requirements in recent years, making relief accessible to more taxpayers who previously wouldn't have qualified for these options.

Question 2

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

Accepted Answer

Debt reduction varies significantly based on your financial situation and which program option you qualify for. Through an Offer in Compromise, some taxpayers settle their debt for 10-20% of what they originally owed—potentially reducing debt by 80-90%. Installment agreements don't reduce the principal debt but stop penalties from accruing and prevent collection actions. Penalty abatement can eliminate thousands in penalties for qualifying taxpayers. The key is having a tax professional evaluate your specific situation to determine which option provides the maximum benefit for your circumstances.

Question 3

Will the IRS stop collection actions while my case is pending?

Accepted Answer

Yes, the IRS typically suspends collection activities while they review your Fresh Start Program application. This means no new levies, liens, or garnishments while your case is being processed. However, interest continues to accrue on your debt during this period. If you're accepted into an installment agreement or your Offer in Compromise is approved, collection actions remain suspended as long as you comply with the agreement terms. This protection is one of the immediate benefits of properly submitting a Fresh Start Program application through qualified representation.

Question 4

How long does the Fresh Start Program application process take?

Accepted Answer

Processing times vary by program type and complexity of your case. Streamlined installment agreements for debts under $50,000 can be approved within 30-60 days. Offers in Compromise typically take 6-12 months for the IRS to review and decide. The IRS has up to two years to accept or reject an Offer in Compromise, and if they don't respond within that timeframe, your offer is automatically accepted. Currently-Not-Collectible status can be granted more quickly, often within 30-90 days with proper documentation of financial hardship.

Question 5

Can I apply for the Fresh Start Program on my own?

Accepted Answer

While you can apply independently, professional representation significantly improves your chances of approval and getting the best possible terms. Tax professionals understand which program option fits your situation, how to present your financial information favorably, and how to avoid common mistakes that lead to rejections. The IRS has strict documentation requirements and specific formulas for calculating acceptable offers. One error in your application can result in rejection and lost time. Professional representation also means you don't have to deal directly with IRS collection agents during the process.

Question 6

What happens if my Fresh Start Program application is denied?

Accepted Answer

If your initial application is denied, you have appeal rights within 30 days of the rejection notice. Many denials result from incomplete documentation or calculation errors that can be corrected on appeal. An experienced tax professional can review the rejection reasons and address the IRS's concerns. If the appeal is unsuccessful, you may still have other options depending on your situation. Sometimes a different Fresh Start Program option might be more appropriate, or your financial circumstances may have changed enough to warrant a new application. The key is having professional guidance to explore all available alternatives rather than giving up after the first denial.

IRS Fresh Start Program Fawn Lake Forest, PA