Question 1

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

Accepted Answer

The reduction depends on your financial situation and which Fresh Start option you qualify for. Offers in Compromise can reduce debt by 80-90% in some cases, settling $50,000 debts for as little as $5,000 or less. Penalty abatement alone can cut your debt in half since penalties often equal or exceed the original tax owed. Installment agreements don't reduce the debt but make it manageable with payments as low as $25-50 per month for qualifying taxpayers. The key is having a tax professional properly calculate your reasonable collection potential and present your case using IRS guidelines. Most taxpayers who try this alone get rejected because they don't understand the complex financial analysis required.

Question 2

What are the eligibility requirements for Fresh Start relief in Pennsylvania?

Accepted Answer

You must owe $50,000 or less in combined taxes, penalties, and interest for most Fresh Start programs. All required tax returns must be filed and current. You need to demonstrate financial hardship or inability to pay the full debt without economic strain. For Pennsylvania residents, this includes considering your state tax obligations alongside federal debt. Self-employed individuals may qualify with a 25% or greater drop in income. Currently Not Collectible status has lower income thresholds but requires detailed financial disclosure. The IRS also looks at your asset equity, monthly income versus expenses, and future earning potential. Having a local tax professional who understands Pennsylvania's cost of living and economic conditions significantly improves your approval chances.

Question 3

How long does the IRS Fresh Start application process take?

Accepted Answer

Simple installment agreements can be approved within 30-60 days. Offers in Compromise typically take 6-12 months for the IRS to review and decide. Currently Not Collectible status can be granted within 30-90 days with proper documentation. The timeline depends heavily on how well your application is prepared and whether the IRS requests additional information. Incomplete or poorly prepared applications get rejected or delayed, sometimes for years. Working with experienced tax professionals speeds up the process because we know exactly what documentation the IRS requires and how to present your financial information in the most favorable light. We also handle all IRS correspondence, so you're not waiting weeks between each communication.

Question 4

Can the IRS reject my Fresh Start application even if I qualify?

Accepted Answer

Yes, the IRS rejects about 60% of Offer in Compromise applications, often for technical reasons rather than actual ineligibility. Common rejection reasons include incomplete financial forms, missing documentation, or mathematical errors in calculating your reasonable collection potential. The IRS also rejects applications when taxpayers underestimate their ability to pay or fail to properly document financial hardship. Many rejections happen because people don't understand the complex IRS Collection Financial Standards used to evaluate applications. Professional representation dramatically improves approval rates because we know how to avoid these common pitfalls. We also know how to appeal rejections and resubmit applications with stronger supporting documentation. The difference between approval and rejection often comes down to presentation and technical accuracy.

Question 5

What happens if I don't qualify for Fresh Start relief options?

Accepted Answer

Even if you don't qualify for the most aggressive relief options, there are still ways to resolve your tax debt. Partial payment installment agreements let you pay less than the full amount over time. Hardship deferrals can temporarily stop collections while you address financial problems. Penalty abatement for reasonable cause can still reduce your debt significantly even if you don't qualify for other programs. Sometimes filing amended returns or innocent spouse relief can eliminate debt entirely if your original returns were incorrect. The key is having someone review your complete situation to identify all available options. Many taxpayers assume they don't qualify for relief when they actually have several viable paths forward. Professional evaluation often uncovers opportunities that weren't initially apparent.

Question 6

Why should I hire a tax professional instead of applying myself?

Accepted Answer

The IRS Fresh Start application process is incredibly complex, with strict deadlines and technical requirements that trip up most taxpayers. One mistake can mean rejection and having to start over, costing months of additional time and stress. Tax professionals understand the Collection Financial Standards, know how to calculate reasonable collection potential accurately, and can present your case in the most favorable light. We also handle all IRS communications, so you don't have to deal with revenue officers or collection agents. Most importantly, we know when to fight and when to negotiate. The IRS isn't on your side - they want to collect as much as possible. Having professional representation levels the playing field and typically results in better outcomes than attempting this process alone. Would you go to court without a lawyer? Then why face the IRS without a trusted tax professional?

IRS Fresh Start Program Lake Como, PA