Question 1

What are the income requirements for the IRS Fresh Start Program?

Accepted Answer

The IRS Fresh Start Program doesn't have specific income limits, but your financial situation determines which tax relief options you qualify for. The IRS looks at your reasonable collection potential - what they can realistically expect to collect from you. If you're self-employed, you need to show a 25% decline in income to qualify for certain benefits like penalty relief. For most programs, you must owe $50,000 or less in combined taxes, penalties, and interest. Your monthly disposable income after necessary living expenses determines your payment capacity for installment agreements or offer amounts.

Question 2

How long does the Fresh Start Program application process take?

Accepted Answer

Processing times vary by program type. Installment agreements typically take 30-60 days for approval. Offers in Compromise can take 6-24 months due to their complexity and the IRS's thorough review process. The IRS has two years to make a determination on your offer. If they don't respond within that timeframe, your offer is automatically accepted. However, proper preparation significantly impacts approval chances and processing speed. Missing documentation or errors can add months to the timeline, which is why professional help matters.

Question 3

Can I apply for the Fresh Start Program if I haven't filed all my tax returns?

Accepted Answer

No, you must be compliant with all required tax filings before applying for most Fresh Start tax relief programs. This means filing all delinquent returns for years you owe taxes. The IRS views current filing compliance as evidence of your commitment to meeting tax obligations going forward. If you're missing returns, we help you get caught up first. We can prepare substitute returns or work with you to file accurate returns that minimize additional liability. Once you're compliant, you become eligible for IRS debt forgiveness programs.

Question 4

What happens if my Fresh Start application is denied?

Accepted Answer

You have appeal rights if your tax relief application is rejected. For Offers in Compromise, you have 30 days to file an appeal with the IRS Independent Office of Appeals using Form 13711. The appeals process gives you a fresh review by someone who wasn't involved in the original decision. Many cases that are initially rejected get approved on appeal when properly presented. We handle appeals regularly and know how to strengthen your case for the second review. If the appeal fails, you can often reapply after addressing the rejection reasons.

Question 5

Will the Fresh Start Program stop IRS collection actions immediately?

Accepted Answer

Yes, most Fresh Start applications trigger automatic collection protection. When you submit an Offer in Compromise or certain other tax debt relief applications, the IRS must stop levies, garnishments, and other collection activities while they review your case. This protection continues throughout the review process and any appeals. However, penalties and interest typically continue accruing during this time. Some programs like Currently Not Collectible status can stop even penalty and interest accumulation if you qualify based on financial hardship.

Question 6

How much will I actually save with the Fresh Start Program?

Accepted Answer

Savings depend on your specific program and financial situation. Offers in Compromise can reduce debt by 90% or more for qualifying taxpayers. Penalty abatement can eliminate 25-40% of your total balance since penalties often make up a significant portion of tax debt. Installment agreements don't reduce the principal amount but stop additional penalties and prevent collection actions. The real savings come from avoiding asset seizure, wage garnishment, and the stress of ongoing IRS problems. Every situation is different, which is why we provide free consultations to give you realistic expectations. End the sleepless nights - call 570-630-0201 or book online today.

IRS Fresh Start Program Herrick Center, PA