Question 1

How do I know if I qualify for the IRS Fresh Start Program?

Accepted Answer

Qualification depends on several factors, but the basic requirements are straightforward. You must owe $50,000 or less in combined taxes, penalties, and interest, have filed all required tax returns, and be able to demonstrate financial hardship or inability to pay the full amount without creating economic strain. Self-employed individuals may qualify if they've experienced a 25% or greater drop in income. The key is proving to the IRS that paying your full tax debt would prevent you from meeting basic living expenses like housing, food, and transportation. We evaluate your specific situation during our free consultation, reviewing your income, expenses, assets, and overall financial picture to determine which Fresh Start options make sense for your circumstances. Every case is different, and what works for one taxpayer might not be the best solution for another.

Question 2

Can the Fresh Start Program really eliminate my tax debt completely?

Accepted Answer

Complete elimination is possible but rare. The most likely scenario for full debt forgiveness is through an Offer in Compromise, where you can settle for significantly less than you owe—sometimes as little as 10-20% of your total debt. More commonly, the Fresh Start Program reduces your burden through penalty abatement, extended payment terms, and protection from aggressive collection actions. Even if your principal tax debt remains, eliminating penalties and interest can save thousands of dollars and make your debt manageable. The program's real value isn't necessarily making your debt disappear—it's giving you realistic options to resolve it without destroying your financial future. A six-year payment plan at $200 per month is infinitely better than wage garnishment or bank levies that could take much more from your paycheck.

Question 3

How long does the Fresh Start Program process take?

Accepted Answer

The timeline varies depending on which relief option you pursue and the complexity of your case. Streamlined installment agreements can often be approved within 30-60 days, especially if you owe less than $50,000 and can afford the calculated monthly payment. Offers in Compromise typically take longer—anywhere from 6 months to over a year. The IRS must thoroughly review your financial information and determine whether your offer represents the most they can reasonably collect from you. This process requires patience, but the potential savings make it worthwhile for qualifying taxpayers. Currently Not Collectible status can be granted relatively quickly if your financial documentation clearly shows hardship. However, the IRS reviews these cases annually, so it's not a permanent solution. We help clients use this time to improve their financial situation and transition to a more permanent resolution.

Question 4

What happens if the IRS rejects my Fresh Start application?

Accepted Answer

Rejection doesn't mean game over—it usually means we need to adjust our approach or provide additional documentation. The IRS rejects many applications simply because they're incomplete or don't include all required financial information, not because the taxpayer doesn't qualify for relief. When an Offer in Compromise is rejected, we can appeal the decision or submit a new offer with different terms. Sometimes the IRS counter-offers with an amount higher than what we initially proposed but still significantly less than your original debt. If one Fresh Start option doesn't work, others might. A rejected Offer in Compromise doesn't disqualify you from an installment agreement or Currently Not Collectible status. Our job is to explore every available avenue until we find the solution that works for your specific situation.

Question 5

Will using the Fresh Start Program hurt my credit score?

Accepted Answer

The Fresh Start Program itself doesn't directly impact your credit score, but the underlying tax debt already may have. If the IRS has filed a tax lien, that's already affecting your credit. The good news is that the Fresh Start Program made it easier to get liens withdrawn once you enter into a payment agreement. Under the current rules, the IRS generally won't file a lien until you owe more than $10,000, up from the previous $5,000 threshold. If you already have a lien, entering into a Direct Debit Installment Agreement can lead to lien withdrawal, which helps your credit score recover faster. Successfully completing a Fresh Start Program resolution actually demonstrates to future creditors that you've taken responsibility for your tax obligations and resolved them through official channels. This is far better for your long-term financial health than ignoring the debt and facing enforced collection actions.

Question 6

Can I handle the Fresh Start Program application myself?

Accepted Answer

You technically can, but the success rate is significantly lower without professional representation. The IRS receives thousands of Fresh Start applications, and many are rejected for technical reasons—missing forms, incorrect calculations, insufficient financial documentation, or failure to present the case in the most favorable light. Tax professionals understand exactly what the IRS is looking for and how to present your financial information to maximize your chances of approval. We know which expenses the IRS allows, how to calculate reasonable collection potential, and how to navigate the appeals process if needed. 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 cost of professional representation is almost always less than the money we save you through better negotiation and avoiding costly mistakes in the application process.

IRS Fresh Start Program Moosic, PA