Question 1

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

Accepted Answer

The reduction depends on your specific financial situation and which program you qualify for. Offers in Compromise can eliminate 90% or more of what you owe if the IRS determines you can't pay the full amount. This happens when your assets plus future earning capacity is less than your total tax debt. Penalty abatement can remove 25-40% of your total debt since penalties often make up a large portion of what you owe. Even installment agreements provide relief by stopping additional penalties and reducing interest rates. The key is getting the right program for your situation—not just any program. Some clients with severe financial hardship qualify for Currently-Not-Collectible status, which stops all collection activity until their financial situation improves. This doesn't eliminate the debt, but it provides breathing room without payments.

Question 2

What are the income requirements for the Fresh Start Program?

Accepted Answer

There's no single income requirement because the Fresh Start Program includes multiple options with different qualifications. For Offers in Compromise, the IRS looks at your reasonable collection potential—basically what you could pay over 10-20 years based on your assets and income. If your monthly income barely covers necessary living expenses, you're more likely to qualify for debt reduction. The IRS uses national and local standards for housing, transportation, and other expenses to determine what you can reasonably afford to pay. For installment agreements, you can owe up to $50,000 and qualify for streamlined approval without providing detailed financial statements. Above that amount, you'll need to submit Form 433-A or 433-B showing your complete financial picture.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

Timeline varies by program type, but most applications take 6-12 months for final approval. Offers in Compromise typically take the longest—8-12 months—because the IRS thoroughly reviews your financial situation and may request additional documentation. Installment agreements under $50,000 can be approved in 30-60 days through the streamlined process. Penalty abatement requests often get resolved in 2-4 months. Currently-Not-Collectible status can be granted relatively quickly if you provide proper documentation of financial hardship. The good news is that most collection activity stops once your application is submitted. This means no new levies or garnishments while the IRS reviews your case. Having professional representation typically speeds up the process because we know exactly what documentation to submit and how to respond to IRS requests.

Question 4

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

Accepted Answer

You must be current on all required tax filings before the IRS will consider most Fresh Start Program applications. This is called "filing compliance" and it's non-negotiable. If you're missing returns from previous years, those need to be filed first. The good news is that filing missing returns often works in your favor. Many people discover they're owed refunds from some years, which can offset what they owe for other years. Sometimes the refunds are large enough to significantly reduce the total debt. Once you're in filing compliance, you have many more options available. The IRS views current filers as lower risk and is more willing to negotiate payment plans or accept settlement offers. This is why getting all returns filed should be your first priority—it opens doors to better resolution options.

Question 5

What happens if my Fresh Start Program application gets rejected?

Accepted Answer

Rejection doesn't mean you're out of options. Most rejections happen because of incomplete documentation, incorrect calculations, or applying for the wrong program type. Professional representation significantly reduces rejection rates because we know exactly what the IRS wants to see. If your Offer in Compromise gets rejected, you can appeal the decision or reapply with updated financial information. Sometimes your financial situation changes enough between applications to qualify for a better settlement. You can also explore other Fresh Start options like installment agreements or penalty abatement. The worst thing you can do is nothing. Rejected applications still provide valuable information about what the IRS will accept. This intelligence helps craft a stronger second application or pivot to a different strategy that better fits your situation.

Question 6

Will the Fresh Start Program stop IRS wage garnishments and bank levies?

Accepted Answer

Yes, submitting a Fresh Start Program application typically stops most IRS collection activity, including wage garnishments and bank levies. This protection begins when the IRS receives your complete application and continues while they review your case. However, the IRS can still file new tax liens and won't release existing liens until you're approved for a program and make required payments. If you're already facing imminent levy action, professional representation can often get emergency collection holds in place while preparing your application. The key is acting quickly. Once the IRS starts levy procedures, you have limited time to respond before they seize assets. Having someone who knows how to work with IRS collection agents can mean the difference between keeping your paycheck and having it garnished while waiting for program approval.

IRS Fresh Start Program Kunkletown, PA