Question 1

Who qualifies for the IRS Fresh Start Program in Pennsylvania?

Accepted Answer

To qualify for the IRS Fresh Start Program, you must owe $50,000 or less in combined tax, penalties, and interest. You need to be current on all tax filings—any unfiled returns must be submitted before applying. This is non-negotiable. The IRS also requires proof of financial hardship for certain options like Offer in Compromise. Self-employed individuals must demonstrate a 25% decline in income to qualify for specific benefits. You must also show ability to stay compliant with future tax obligations, including making estimated payments if you're self-employed. The program is designed for taxpayers who genuinely cannot pay their full tax debt under normal collection procedures, not those simply trying to avoid paying what they legitimately owe.

Question 2

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

Accepted Answer

The reduction depends entirely on which Fresh Start option you qualify for and your specific financial situation. Through Offer in Compromise, eligible taxpayers can reduce their tax debt by up to 90% or more—we've seen cases where $50,000 in tax debt settled for as little as $5,000. Installment agreements don't reduce the principal debt but make it manageable with affordable monthly payments spread over up to six years. Penalty abatement can eliminate thousands in penalties, significantly reducing your total amount owed—this alone can save 25-50% of your total debt in many cases. Currently Not Collectible status doesn't reduce the debt but stops all collection actions and prevents additional penalties from accruing. The key is having a qualified tax professional evaluate your case to determine which option provides maximum benefit for your specific situation.

Question 3

Will the Fresh Start Program stop IRS collection actions immediately?

Accepted Answer

Yes, once you're accepted into most Fresh Start programs, IRS collection actions like wage garnishments and bank levies typically stop. When you apply for an Offer in Compromise, the IRS generally suspends collection activities during the entire review process, which can take 6-12 months. Currently Not Collectible status immediately halts all collection actions if approved, including wage garnishments, bank levies, and asset seizures. Even with installment agreements, the IRS stops aggressive collection efforts as long as you make your monthly payments on time. However, this protection only lasts as long as you remain compliant with your Fresh Start agreement terms. Missing payments or falling behind on current tax obligations can result in immediate resumption of collection activities. That's why it's crucial to work with professionals who ensure you understand and can meet all program requirements.

Question 4

How long does the Fresh Start Program application process take?

Accepted Answer

The timeline varies significantly by program type and complexity of your case. Streamlined installment agreements for debts under $50,000 are typically processed within 30-60 days and require minimal financial documentation, making them the fastest option. Offer in Compromise applications take considerably longer—usually 6-12 months for the IRS to review and make a decision. The IRS must verify all financial information and may request additional documentation during the review process. Currently Not Collectible status can be granted relatively quickly, often within 30-45 days if you provide proper documentation of financial hardship. Working with experienced tax professionals significantly speeds up the process by ensuring all paperwork is complete and accurate from the start, avoiding the delays that occur when the IRS requests missing information or corrections.

Question 5

What happens if I don't qualify for the standard Fresh Start Program?

Accepted Answer

If you don't qualify for standard Fresh Start options, we can still negotiate alternative solutions tailored to your situation. This might include custom installment agreements with longer payment terms or lower monthly payments based on your specific financial circumstances. We can pursue partial payment installment agreements, where you pay what you can reasonably afford until the collection statute expires—typically 10 years from the date of assessment. Penalty abatement for reasonable cause might still be available even if you don't qualify for other programs, potentially eliminating thousands in penalties. Sometimes combining multiple strategies achieves better results than any single Fresh Start option alone. For example, we might secure penalty abatement to reduce your total debt, then negotiate a custom payment plan for the remaining balance. The key is having professionals who understand all available options, not just the standard Fresh Start programs.

Question 6

Should I try to handle Fresh Start applications myself or hire professionals?

Accepted Answer

While you can technically apply yourself, the Fresh Start Program involves complex financial calculations and specific IRS procedures where mistakes are extremely costly. One error on your Offer in Compromise application means automatic rejection and a two-year waiting period before you can reapply—potentially costing you thousands in additional penalties and interest. We know exactly how to present your financial information for maximum benefit and can negotiate terms you might not even know exist. We also handle all IRS communications, protecting you from inadvertently saying something that could harm your case. The IRS agents are trained negotiators—you need someone equally skilled on your side. As we always tell our clients: you wouldn't go to court without a lawyer, so why would you face the IRS without a trusted tax professional? The cost of professional help is typically far less than the additional debt and penalties you'll face if your application is rejected or you accept unfavorable terms.

IRS Fresh Start Program Pocono Heights, PA