Question 1

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

Accepted Answer

The reduction amount depends on your specific financial situation and which program component you qualify for. Some taxpayers may reduce their federal tax debts by up to 90 percent, while others might qualify for affordable payment plans or penalty abatement. In Offer in Compromise cases, taxpayers may pay as little as 10% to 20% of their total debt, but this varies based on income, assets, and ability to pay. The IRS evaluates financial records to determine if full payment is possible before granting relief, and if you can pay the balance in full, an OIC is unlikely to be approved. The key is having a qualified professional evaluate your case and present your financial situation effectively to maximize your chances of the best possible outcome.

Question 2

What are the requirements to qualify for the Fresh Start Program?

Accepted Answer

You may qualify if you owe $50,000 or less in taxes, penalties, and interest, are current on all required tax filings, and can demonstrate financial hardship or inability to pay the debt in full without economic strain. Self-employed individuals may qualify if they show a drop of 25% or more in income. You must also stay compliant with future tax obligations, meaning you file and pay your current year taxes on time. Taxpayers who may not qualify include those who haven't filed all required returns, are currently in bankruptcy proceedings, or self-employed individuals who haven't made required estimated payments for the current year. The program has multiple components, so even if you don't qualify for one option, you might qualify for another. A professional evaluation determines which programs fit your specific situation.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

The timeline varies significantly based on which program you're applying for and the complexity of your case. Installment agreements can often be approved within 30-60 days if your financial documentation is complete and accurate. Offers in Compromise typically take 6-12 months for the IRS to process and evaluate. You can now take up to 24 months to pay off an approved offer in compromise, and for the first time ever, taxpayers can now apply for offer in compromise online. Currently Not Collectible status can sometimes be granted more quickly if you clearly demonstrate financial hardship. The key to faster processing is having all required documentation prepared accurately from the start, which is why professional representation is valuable.

Question 4

Will the IRS stop collection actions while my application is being processed?

Accepted Answer

When you have professional representation and proper paperwork is filed, the IRS typically suspends most collection activities while your case is under review. This includes stopping wage garnishments, bank levies, and preventing new liens from being filed. However, this protection isn't automatic. Your representative must establish power of attorney and communicate directly with the IRS to ensure collection actions are halted. Without professional representation, the IRS may continue collection efforts even while reviewing your application. It's crucial to act quickly when you receive IRS notices. The sooner you establish representation and begin the application process, the sooner you can get protection from collection actions. Waiting only makes the situation worse and limits your options.

Question 5

What happens if my Fresh Start Program application is denied?

Accepted Answer

If your initial application is denied, you typically have appeal rights and alternative options. The denial letter will explain the reasons, which often relate to incomplete documentation, income calculations, or asset valuations that can be addressed. You may be able to reapply with corrected information, appeal the decision, or pursue a different resolution option. For example, if an Offer in Compromise is denied, you might still qualify for an installment agreement or Currently Not Collectible status. Having professional representation is especially valuable in these situations because tax professionals understand how to address IRS objections and present your case more effectively. We can review the denial reasons and determine the best next steps to achieve resolution.

Question 6

How much does professional tax resolution help cost in Pennsylvania?

Accepted Answer

Professional tax resolution fees vary based on the complexity of your case and which services you need. Most firms charge between $2,500-$5,000 for comprehensive representation, though simple cases might cost less and complex cases more. We offer a free initial consultation to evaluate your situation and explain your options before you commit to any fees. We also offer payment plans to make our services more affordable, recognizing that clients are already facing financial difficulties. When considering cost, remember that professional representation often saves far more than it costs. The average tax resolution case is worth $3,000-$4,000 in debt reduction, and we know how to navigate IRS procedures to achieve the best possible outcome for your situation.

IRS Fresh Start Program Pocono Country Place, PA