Question 1

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

Accepted Answer

Qualifying taxpayers can reduce their federal tax debt by up to 90 percent through the program's Offer in Compromise option. The actual amount depends on your current income, assets, and ability to pay. The IRS calculates what they can realistically collect from you over the next 10 years, then often accepts a settlement for much less.

For example, if you owe $50,000 but can only afford $300 per month, the IRS might accept $15,000 to settle the entire debt. The key is proving you cannot pay the full amount without creating financial hardship. We analyze your complete financial picture to present the strongest possible case for maximum debt reduction.

Not everyone qualifies for debt reduction, but most taxpayers can get more manageable payment terms through streamlined installment agreements that stretch payments over up to 72 months.

Question 2

What are the requirements to qualify for the Fresh Start Program?

Accepted Answer

For streamlined installment agreements, you must owe $50,000 or less in combined taxes, penalties, and interest. You need to be current on all tax filings and agree to direct debit payments. The IRS doesn't require detailed financial disclosure for these agreements, making approval much faster.

Offer in Compromise has stricter requirements. You must prove you cannot pay the full debt amount through your current income and assets. All tax returns must be filed, and you cannot be in an open bankruptcy proceeding. Self-employed individuals must be current on estimated tax payments for the current year.

Currently Not Collectible status requires demonstrating that paying anything would create financial hardship. The IRS temporarily stops collection while your financial situation improves. Each option has specific eligibility criteria, which is why professional evaluation is crucial to determine your best path forward.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

Streamlined installment agreements typically get approved within 30-60 days once properly submitted. These are the fastest option because they require minimal financial documentation. The IRS processes them almost automatically if you meet the basic requirements.

Offer in Compromise takes 6-12 months on average, sometimes longer for complex cases. The IRS thoroughly reviews your financial situation, may request additional documentation, and sometimes conducts field visits. Having professional representation speeds up the process because we know exactly what documentation the IRS needs upfront.

Currently Not Collectible determinations usually take 30-90 days. The timeline depends on how quickly we can gather your financial information and present it to the IRS. During the application process, the IRS typically suspends collection activities, giving you immediate relief from levies and garnishments while your case is under review.

Question 4

Will the IRS remove existing tax liens through the Fresh Start Program?

Accepted Answer

Yes, the IRS will remove federal tax liens under specific circumstances. If you pay your tax debt in full, the lien gets released within 30 days. For installment agreements, the IRS removes liens after you make three consecutive on-time payments and your balance drops below $25,000.

The Fresh Start Program increased the threshold for filing new liens from $5,000 to $10,000, meaning fewer taxpayers face liens on their credit reports. If you already have a lien, setting up direct debit payments and maintaining compliance can lead to lien withdrawal even before the debt is fully paid.

Lien removal significantly improves your credit score and ability to get loans or refinance property. We handle all the paperwork for lien withdrawal requests and follow up with the IRS to ensure the lien gets properly removed from your credit report. The process typically takes 30-45 days once you meet the requirements.

Question 5

Can I apply for the Fresh Start Program without professional help?

Accepted Answer

You can apply directly to the IRS, but most taxpayers benefit significantly from professional representation. The IRS doesn't advocate for you—they're trying to collect the maximum amount possible. Tax professionals know how to present your financial situation to minimize what you owe and maximize your chances of approval.

The paperwork is complex and mistakes are costly. Incorrect financial disclosure can lead to rejection and restart the entire process. IRS agents often request additional documentation that inexperienced taxpayers don't know how to provide properly. One wrong answer during IRS questioning can disqualify you from certain programs.

Professional representation also provides protection during the process. The IRS must deal with your representative instead of contacting you directly. This prevents you from accidentally saying something that hurts your case. Given what's at stake—potentially tens of thousands of dollars in debt reduction—professional help usually pays for itself many times over.

Question 6

What happens if the IRS rejects my Fresh Start Program application?

Accepted Answer

Rejection doesn't mean you're out of options. Most rejections happen because of incomplete documentation, incorrect financial disclosure, or applying for the wrong type of relief. We can often address the IRS's concerns and resubmit with better supporting documentation.

If your Offer in Compromise gets rejected, you have 30 days to appeal the decision or request a hearing with the IRS Appeals Office. Many cases that get rejected initially are approved on appeal when presented properly. Appeals officers have more flexibility than regular IRS agents and often take a more reasonable approach.

Alternative options include different payment plan structures, penalty abatement requests, or Currently Not Collectible status. Sometimes what looks like a rejection is actually the IRS suggesting a different approach that works better for your situation. The key is having someone who understands all available options and can pivot quickly when one approach doesn't work.

IRS Fresh Start Program Green Grove, PA