Question 1

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

Accepted Answer

The reduction depends on your specific financial situation, but significant relief is common. We regularly see 70-90% reductions through Offers in Compromise for qualifying taxpayers. Here's what's realistic: If you owe $30,000 but can only afford $200 monthly payments, an installment agreement might be your best option. But if your income and assets show you truly can't pay the full amount, an Offer in Compromise might settle that $30,000 debt for $3,000-$5,000. The key is proving to the IRS that you either can't pay the full amount without creating financial hardship, or that your assets and future income potential make it unlikely they'll collect the full debt anyway. Given Franklin's economic challenges and Pennsylvania's high tax burden, many residents qualify for significant relief.

Question 2

What are the requirements to qualify for Fresh Start in Franklin, PA?

Accepted Answer

You must owe $50,000 or less in combined taxes, penalties, and interest, be current on all required tax filings, and demonstrate financial hardship or inability to pay the full amount. The financial hardship requirement is where many Franklin residents qualify. If paying your tax debt in full would prevent you from covering basic living expenses—housing, food, transportation, medical care—you likely meet this requirement. The IRS uses specific allowable expense standards, and they're often more generous than people expect. You also need to stay current on all future tax obligations while in the program. This means making estimated payments if you're self-employed, and having proper withholding from your paycheck if you're an employee. The IRS won't help you with old debt if you're creating new debt at the same time.

Question 3

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

Accepted Answer

Most cases resolve within 3-6 months, though complex situations involving multiple tax years or business debt can take 6-12 months to fully complete. Installment Agreements are typically the fastest, often approved within 30-60 days once we submit your application. The IRS has streamlined these for taxpayers owing under $50,000, especially when you agree to automatic payments from your bank account. Offers in Compromise take longer—usually 4-8 months—because the IRS conducts a thorough financial investigation. They want to verify your income, assets, and expenses before agreeing to accept less than the full amount owed. But this thorough review is also why these offers, when accepted, provide such dramatic debt reduction.

Question 4

Can I apply for Fresh Start relief if I haven't filed recent tax returns?

Accepted Answer

You must be current on all required tax filings before the IRS will consider any Fresh Start relief options. This means filing all missing returns first, which we can help you complete. Many Franklin residents avoid filing because they know they owe money they don't have. But not filing makes everything worse—you're hit with failure-to-file penalties (25% of what you owe) on top of failure-to-pay penalties (0.5% per month). These penalties can double or triple your actual tax debt. The good news is that once we file your missing returns, you immediately become eligible for Fresh Start relief. And often, the relief we can secure through the program more than makes up for any additional tax you owe on those unfiled returns. We've seen clients who were terrified to file three years of missing returns end up paying less total than they originally thought they owed on just one year.

Question 5

Will entering the Fresh Start Program hurt my credit score?

Accepted Answer

No, participating in IRS Fresh Start programs does not directly impact your credit score. In fact, it often helps by preventing or removing tax liens that do damage your credit. Tax liens are public records that can drop your credit score by 100+ points and make it nearly impossible to get approved for loans or credit cards. The Fresh Start Program includes provisions for lien withdrawal—meaning the IRS will remove the lien from public records once you're in compliance with your agreement. If you're already dealing with a tax lien, getting into a Fresh Start agreement and making your first three payments can qualify you for lien withdrawal. This removes the lien from your credit report entirely, not just marks it as "satisfied." For many Franklin residents, this credit score improvement is worth tens of thousands of dollars in better loan terms over the years.

Question 6

What happens if I miss payments on my Fresh Start agreement?

Accepted Answer

Missing payments can void your agreement and restart IRS collection activities, but there are options to get back on track if you act quickly and communicate with the IRS. If you miss a payment, you typically have 30-60 days to cure the default before the IRS terminates your agreement. This might mean making up the missed payment plus the current payment, or requesting a modification if your financial situation has changed. The key is not to panic and hide. The IRS is often willing to work with taxpayers who communicate proactively about temporary financial difficulties. We've helped clients modify their agreements when they lost jobs, had medical emergencies, or faced other hardships. But ignoring missed payments and hoping the IRS doesn't notice will definitely result in your agreement being terminated and collection activities resuming.

IRS Fresh Start Program Franklin, PA