Question 1

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

Accepted Answer

You may qualify for the Fresh Start Program if you owe $50,000 or less in combined taxes, penalties, and interest, and you're current on all required tax filings. The program is designed for taxpayers facing financial hardship or those who can demonstrate an inability to pay their full tax debt without causing economic strain.Self-employed individuals in the Foxtown Hill area may qualify if they can show a 25% or more drop in income, which has been common during economic downturns affecting the tourism and service industries in our region. The key is having all your tax returns filed and being able to document your financial situation accurately.Even if you owe more than $50,000, there may still be options available. The most important thing is to act quickly before the IRS takes aggressive collection actions like wage garnishment or bank levies.

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 in monthly payments, typically up to 72 months. This is ideal if you can afford to pay the full amount but just need more time. The Fresh Start Program has made these agreements easier to get, with streamlined applications for debts under $50,000.An Offer in Compromise, on the other hand, actually reduces the total amount you owe. If approved, you can settle your tax debt for far less than the original amount - sometimes 10-20 cents on the dollar. However, you must prove that paying the full amount would cause significant financial hardship or that there's doubt about how much you actually owe.Both options stop IRS collection actions while your application is being processed. The right choice depends on your specific financial situation, which is why a professional evaluation is so important.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

The timeline varies depending on which Fresh Start Program option you pursue. Installment agreements are typically the fastest, often approved within 30-60 days if all paperwork is submitted correctly. The IRS has streamlined these applications significantly under the Fresh Start Program.Offers in Compromise take longer, usually 6-12 months for a final decision. However, the IRS must respond to your initial application within 24 months or it's automatically accepted. During this time, most collection activities are suspended, giving you breathing room.Penalty abatement requests can be processed relatively quickly, often within 30-90 days. The key to speeding up any application is having all your documentation organized and submitted correctly the first time. That's where our professional representation makes a huge difference - we know exactly what the IRS needs and how to present your case effectively.

Question 4

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

Accepted Answer

Yes, in most cases. When you submit a properly completed application for an installment agreement or Offer in Compromise, the IRS is required to suspend most collection activities while your application is being reviewed. This includes wage garnishments, bank levies, and asset seizures.However, the IRS won't stop collections for incomplete or frivolous applications. This is why it's crucial to have your paperwork prepared correctly and submitted with all required documentation. Our professional representation ensures your application meets IRS requirements and triggers the automatic collection suspension.Even if you're already facing active collection, we can often get a temporary hold placed on your account while we prepare and submit your Fresh Start Program application. The sooner you act, the more options we have to protect your wages and assets.

Question 5

Can the Fresh Start Program help with both federal and Pennsylvania state taxes?

Accepted Answer

The IRS Fresh Start Program specifically addresses federal tax debt, but many of the same principles apply to Pennsylvania state tax issues. Pennsylvania has its own installment agreement programs and penalty abatement options for taxpayers facing financial hardship.As a Pennsylvania-based firm, we handle both federal and state tax resolution. Often, resolving your federal tax debt through the Fresh Start Program creates a template for negotiating with the Pennsylvania Department of Revenue. Both agencies want to collect what you legitimately owe, but they're also willing to work with taxpayers who demonstrate good faith efforts to resolve their debts.The key is addressing both federal and state issues simultaneously. Ignoring state taxes while focusing only on federal debt can create new problems down the road. We coordinate with both agencies to ensure you get comprehensive relief that addresses all your tax obligations.

Question 6

What happens if my Fresh Start Program application is denied?

Accepted Answer

A denial isn't the end of the road - it's often just the beginning of the negotiation process. The IRS must provide specific reasons for any denial, and in many cases, we can address those issues and resubmit. Sometimes it's a matter of providing additional documentation or adjusting the payment terms.If an Offer in Compromise is rejected, you typically have the right to appeal the decision or submit a new offer with different terms. For installment agreements, rejection usually means the proposed payment amount was too low, so we can often get approval with slightly higher monthly payments.Our professional representation is crucial here because we know how to interpret IRS rejection letters and what steps to take next. We've successfully overturned denials by addressing the IRS's specific concerns and presenting additional evidence. Even in worst-case scenarios, there are usually alternative resolution options available.

IRS Fresh Start Program Foxtown Hill, PA