Question 1

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

Accepted Answer

Eligible taxpayers often see reductions of 90% or more through the program's Offer in Compromise option. The exact amount depends on your income, expenses, and asset value - what the IRS calls your "reasonable collection potential." For example, if you owe $75,000 but can only afford $150 monthly payments, an Offer in Compromise might settle your entire debt for $8,000 to $12,000. The IRS would rather collect something than nothing, especially if your financial situation makes full payment unlikely. However, qualification requirements are strict. You must be current on all tax filings, have no open bankruptcy proceedings, and demonstrate genuine financial hardship. That's why professional evaluation is crucial before applying.

Question 2

What happens if I don't qualify for debt reduction programs?

Accepted Answer

Even if you don't qualify for an Offer in Compromise, the Fresh Start Program includes several other relief options. Installment Agreements let you pay over time with significantly lower monthly payments than the IRS initially demands. Penalty Abatement can remove failure-to-file and failure-to-pay penalties, which often represent 25% to 50% of your total debt. For a $40,000 tax bill, removing penalties could save you $10,000 to $20,000 immediately. Currently-Not-Collectible status temporarily stops all collection activities if you're unemployed, disabled, or facing serious financial hardship. While interest continues to accrue, you get breathing room to stabilize your finances without fear of wage garnishment or asset seizure.

Question 3

How long does the IRS Fresh Start Program application process take?

Accepted Answer

Simple Installment Agreements for debts under $50,000 can be approved within 30 to 45 days if you meet streamlined criteria. These require minimal financial documentation and offer automatic approval for qualifying taxpayers. Offers in Compromise take 6 to 12 months for complete processing. The IRS must verify your financial information, investigate your assets, and determine if your offer represents your maximum collection potential. During this period, collection activities typically stop. Penalty Abatement requests usually resolve within 60 to 90 days, depending on the complexity of your case and the specific penalties involved. Currently-Not-Collectible determinations can be made within 30 days if you provide complete financial documentation proving hardship.

Question 4

Can the IRS still garnish my wages while my application is pending?

Accepted Answer

Generally no - most Fresh Start Program applications trigger an automatic stay of collection activities. This means the IRS cannot issue new wage garnishments, bank levies, or asset seizures while your case is under review. However, existing garnishments may continue unless you specifically request their release as part of your application. If you're already facing active collection, it's crucial to apply immediately to stop further enforcement actions. The key is acting quickly. Once you submit a complete application with required documentation, you gain protection from new collection activities. But the IRS won't retroactively stop actions they've already initiated before your application was filed.

Question 5

What documents do I need to apply for Fresh Start Program relief?

Accepted Answer

You'll need complete financial documentation including bank statements, pay stubs, monthly expense records, and asset valuations. The IRS requires three months of bank statements and proof of all income sources, including wages, self-employment, rental income, and government benefits. For Offers in Compromise, you'll also need Form 433-A (individuals) or Form 433-B (businesses), which detail your complete financial picture. Asset documentation includes vehicle titles, property deeds, retirement account statements, and business valuations if applicable. Tax compliance is mandatory - all required returns must be filed before applying. If you have unfiled returns, that becomes the first priority. Missing even one required return will result in automatic application rejection, regardless of your financial situation.

Question 6

Should I try to handle my IRS Fresh Start Program application myself?

Accepted Answer

The IRS accepts self-prepared applications, but success rates are significantly lower without professional representation. Tax resolution specialists understand IRS policies, negotiation strategies, and common rejection reasons that most taxpayers don't know. For example, the IRS rejects about 70% of self-prepared Offers in Compromise, often for minor documentation errors or miscalculated financial figures. Professional representation increases approval odds and typically results in lower settlement amounts through strategic negotiation. Consider the stakes - you're potentially saving tens of thousands of dollars in tax debt. Professional fees are typically a fraction of the debt reduction achieved, making expert representation a smart investment rather than an unnecessary expense. End the sleepless nights. Call 570-630-0201 or book online today.

IRS Fresh Start Program Franklin Forks, PA