Question 1

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

Accepted Answer

You likely qualify if you owe $50,000 or less in combined taxes, penalties, and interest, have filed all required tax returns, and can demonstrate financial hardship or inability to pay the full amount. Self-employed individuals may qualify with a 25% or greater drop in income. The key is having all your returns filed and being current on any estimated tax payments. Even if you owe more than $50,000, you might still qualify for certain Fresh Start benefits like penalty relief or Currently Not Collectible status. We'll review your complete situation during our consultation and tell you exactly which options are available. Every case is different, and what works for your neighbor might not be the best solution for you.

Question 2

What's the difference between an installment agreement and Offer in Compromise?

Accepted Answer

An installment agreement lets you pay your full tax debt over time – usually 72 months or less for debts under $50,000. You're still paying everything you owe, but in manageable monthly payments. The IRS will continue charging interest, but collection activities stop once you're approved. An Offer in Compromise actually reduces the total amount you owe. If approved, you settle your debt for less than the full amount – sometimes dramatically less. However, the IRS only accepts offers when they believe it's the most they can reasonably collect from you. The choice depends on your financial situation. If you can afford to pay the full amount over time, an installment agreement is usually faster and easier. If paying the full amount would create genuine hardship, an Offer in Compromise might be worth pursuing despite the more complex application process.

Question 3

How long does the Fresh Start Program process take in Pennsylvania?

Accepted Answer

Installment agreements can often be approved within a few weeks, especially for streamlined agreements under $50,000. These require minimal documentation and have simplified approval processes. Offers in Compromise take longer – typically 6 to 12 months for the IRS to review and respond. The timeline depends on the complexity of your case and how quickly you can provide required financial documentation. Penalty abatement requests can be processed in 30-90 days, depending on the type of penalties and your compliance history. Currently Not Collectible status can often be achieved within 60 days if you clearly meet the hardship criteria.

Question 4

Will the IRS Fresh Start Program affect my credit score?

Accepted Answer

The Fresh Start Program itself doesn't directly impact your credit score, but resolving your tax debt can improve your financial situation significantly. Tax liens, which used to be filed for debts as low as $5,000, are now only filed for debts over $10,000 under Fresh Start rules. If you already have a tax lien on your credit report, getting into an installment agreement or paying off your debt can lead to lien withdrawal, which removes it from your credit report entirely. This is different from lien release, which just shows the debt as satisfied but leaves the lien on your record. Being in compliance with a payment plan also prevents new liens from being filed, protecting your credit going forward. The key is staying current with your agreement and any new tax obligations.

Question 5

Can I apply for Fresh Start Program benefits myself, or do I need professional help?

Accepted Answer

You can technically apply for Fresh Start benefits yourself – the IRS provides forms and instructions on their website. However, the process is complex and mistakes can be costly. A rejected Offer in Compromise application, for example, means you lose your application fee and any payments you made during the review process. Professional representation also provides immediate protection. When we establish representation, all IRS collection activities must stop while we work on your case. If you're handling it yourself, collection can continue throughout the process. We also know which option is most likely to succeed for your specific situation. Many people assume they need an Offer in Compromise when a simple installment agreement or penalty abatement would resolve their problem faster and with less hassle. Getting the strategy right from the start saves time, money, and stress.

Question 6

What happens if my Fresh Start Program application is denied?

Accepted Answer

If an installment agreement is denied, we can usually identify the issue quickly and resubmit with corrections. Common problems include errors in financial information or choosing the wrong payment amount. These are typically easy fixes. Offer in Compromise rejections are more complex. The IRS might reject based on their calculation of your reasonable collection potential, or because they believe you can afford to pay more than you offered. We can appeal the decision, provide additional documentation, or explore other resolution options. The good news is that being denied for one Fresh Start option doesn't disqualify you from others. If your Offer in Compromise is rejected, you might still qualify for an installment agreement, penalty abatement, or Currently Not Collectible status. We'll keep working until we find a solution that works for both you and the IRS.

IRS Fresh Start Program North Water Gap, PA