Question 1

Do I qualify for the IRS Fresh Start Program in Pennsylvania?

Accepted Answer

You may qualify if you owe $50,000 or less in combined taxes, penalties, and interest and have filed all required tax returns. The program considers your current financial situation, including income, necessary expenses, and assets. Self-employed individuals must show a 25% decline in income for certain benefits. However, qualification isn't just about meeting basic requirements. The IRS evaluates your "reasonable collection potential" - essentially what they believe they can realistically collect from you. If you can prove financial hardship or that full payment would prevent you from meeting basic living expenses, you may qualify even with higher income levels. The best way to know if you qualify is through a professional evaluation of your complete financial picture. We review your tax transcripts, analyze your income and expenses, and determine which Fresh Start option gives you the best outcome.

Question 2

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

Accepted Answer

Debt reduction varies significantly based on your financial situation. Through an Offer in Compromise, some taxpayers settle for 10-15% of what they originally owed. Others may get penalty abatement that removes 25-40% of their total debt. Payment plans don't reduce the principal but stop additional penalties and interest from accruing. The key factors are your income, necessary expenses, asset equity, and ability to pay over time. The IRS uses specific formulas to calculate what they'll accept, but these calculations require expertise to navigate properly. For example, they now consider only 12-24 months of future income for settlement calculations, down from the previous 48-60 months. What matters most isn't the percentage of reduction but getting a resolution you can actually live with. A payment plan of $200 per month might be better than settling for a lump sum you can't afford to pay.

Question 3

Will the Fresh Start Program stop IRS collection actions immediately?

Accepted Answer

Once we submit your Fresh Start application, IRS collection activities typically stop while your case is under review. This means no more wage garnishments, bank levies, or asset seizures during the application process. However, penalties and interest may continue to accrue until your case is resolved. If you're approved for Currently Not Collectible status, all collection actions stop immediately and remain suspended as long as your financial situation doesn't improve significantly. For payment plans, collections stop once you begin making agreed payments. With Offers in Compromise, you're protected during the application and appeal periods. The important thing to understand is that you don't have to wait until your debt is completely resolved to get relief from aggressive collection actions. Simply having a pending application provides immediate protection in most cases.

Question 4

How long does the IRS Fresh Start Program application process take?

Accepted Answer

The timeline varies by program type and case complexity. Installment agreements can often be approved within 30-60 days. Offers in Compromise typically take 6-12 months for initial review, with additional time if appeals are necessary. Currently Not Collectible determinations usually happen within 60-90 days. The IRS is required to make a decision on Offers in Compromise within two years, or your offer is automatically accepted. However, incomplete applications or missing documentation can significantly delay the process. That's why proper preparation and professional representation are crucial. During this time, you're protected from collection actions, which means the stress and pressure you've been feeling stops immediately. Even if the process takes several months, you have peace of mind knowing your case is being handled properly and you're protected from aggressive IRS collection tactics.

Question 5

What happens if my Fresh Start Program application is denied?

Accepted Answer

If your initial application is denied, you have appeal rights that must be exercised within 30 days. Many cases that are initially rejected get approved on appeal with additional documentation or revised terms. The key is understanding why the application was denied and addressing those specific issues. For Offers in Compromise, you can submit a new offer with different terms if your financial situation changes. With installment agreements, denial usually means the IRS wants a higher monthly payment than you proposed. Currently Not Collectible denials often require better documentation of financial hardship. Having professional representation significantly improves your chances of approval, both initially and on appeal. We know what the IRS looks for, how to present your case effectively, and how to address common objections before they become problems.

Question 6

Should I try to handle the Fresh Start Program application myself?

Accepted Answer

While you can technically apply yourself, the process is complex and mistakes are costly. The IRS receives over 60,000 Offer in Compromise applications annually but approves less than 25%. Most rejections are due to incomplete applications, insufficient documentation, or unrealistic offers rather than genuine ineligibility. The financial forms alone are 20+ pages and require detailed documentation of every aspect of your financial life. One mistake in calculating your reasonable collection potential can result in rejection and wasted months. Plus, you lose the protection of professional representation during IRS communications. Would you go to court without a lawyer? Of course not. Then why would you go before the IRS without a trusted tax professional? The stakes are too high and the process too complex to risk handling alone, especially when professional help is available at reasonable rates with payment plans.  End the sleepless nights. Call 570-630-0201 or book online today. We will stand between you and the IRS, negotiate the lowest legal settlement, and give you the fresh start you deserve.

IRS Fresh Start Program Marshalls Creek, PA