Question 1

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

Accepted Answer

The reduction depends on your financial situation and which Fresh Start option you qualify for. Through Offers in Compromise, eligible taxpayers can settle their debt for significantly less than they owe - we've seen reductions of 70-90% for qualified applicants. Installment agreements don't reduce the total debt but make payments affordable based on your income and expenses. The IRS now allows up to 72 months for debts under $50,000, with monthly payments as low as your financial situation allows. Penalty abatement can eliminate thousands in penalties, reducing your overall balance substantially. The key is having a professional evaluate your specific situation to determine which option provides maximum benefit for your circumstances.

Question 2

What happens if I can't afford the monthly payment plan?

Accepted Answer

If you can't afford even the minimum installment agreement payment, you may qualify for Currently Not Collectible (CNC) status. This temporarily halts all IRS collection activities while you're experiencing financial hardship like unemployment, disability, or overwhelming expenses. We can also negotiate partial payment installment agreements where your monthly payment is less than what would fully pay off the debt before the collection statute expires. This means you pay what you can reasonably afford, and the remaining balance may never be collected. For those facing extreme hardship, an Offer in Compromise based on doubt as to collectibility can settle the entire debt for pennies on the dollar. We thoroughly document your financial situation to present the strongest case to the IRS.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

Simple installment agreements can be approved within 30-60 days once we submit your application. More complex cases like Offers in Compromise typically take 6-12 months for the IRS to review and make a decision, but the wait is worth it for the potential savings. Currently Not Collectible status can often be granted quickly when you're facing immediate financial hardship. The timeline depends on your specific situation, the completeness of your documentation, and which relief option provides the best outcome. During the entire application process, IRS collection activities are suspended. This means no levies, garnishments, or asset seizures while your case is being reviewed. We keep you updated throughout and handle all IRS communications so you can focus on your daily life.

Question 4

Will the Fresh Start Program affect my credit score?

Accepted Answer

Tax liens that were already filed may appear on your credit report, but the Fresh Start Program made it easier to get liens withdrawn after entering a payment agreement. Once withdrawn, the lien is completely removed from your credit report within 30 days. Successfully completing a payment plan or Offer in Compromise doesn't directly improve your credit score, but it prevents additional tax liens from being filed. This protects your credit from further damage and stops the IRS from claiming your property. The bigger impact is eliminating the stress and financial drain of unpaid tax debt. When you're no longer worried about IRS collection actions, you can focus on rebuilding your overall financial health and improving your credit profile.

Question 5

Do I need to file all my back tax returns before applying?

Accepted Answer

Yes, you must be current on all required tax filings before the IRS will approve any Fresh Start relief option. This includes both personal and business returns if you're self-employed or have rental income. We help clients prepare and file missing returns as part of the Fresh Start process. Having unfiled returns actually strengthens your case in some situations, as the IRS is more willing to negotiate when you demonstrate good faith by coming into compliance voluntarily. Filing back returns also ensures we're working with accurate tax liability figures. Sometimes the amount you actually owe is less than what you think, especially when you're entitled to deductions or credits you didn't claim on time.

Question 6

What if the IRS rejects my Fresh Start application?

Accepted Answer

If your initial application is rejected, we have several options depending on the reason for rejection. We can appeal the decision within 30 days, provide additional financial documentation, or modify the terms of your proposal based on the examiner's feedback. Many rejections are due to incomplete financial information or calculation errors, which we can correct and resubmit. For Offers in Compromise, we often need to adjust the offer amount based on updated financial analysis or new information the IRS requests. In some cases, a different Fresh Start option may be more appropriate for your situation. If an Offer in Compromise is rejected, you might still qualify for a streamlined installment agreement or Currently Not Collectible status. We explore all available options until we find a solution that works.

IRS Fresh Start Program Greene, PA