Question 1

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

Accepted Answer

You may qualify for Fresh Start relief if you owe $50,000 or less in combined taxes, penalties, and interest, and you're current on all required tax filings. Self-employed individuals often qualify if they've experienced a 25% or greater drop in income. The program also considers your ability to pay the full amount without creating financial hardship. If paying your tax debt in full would prevent you from covering basic living expenses, you're likely a good candidate for relief. Financial hardship isn't just about being broke—it's about whether full payment would create an unreasonable burden on your daily life. Each case is unique, which is why we offer free consultations to properly evaluate your situation. We review your income, expenses, assets, and overall financial condition to determine which Fresh Start option gives you the best outcome.

Question 2

Can the Fresh Start Program really reduce my tax debt by 90%?

Accepted Answer

Yes, but only if you qualify for an Offer in Compromise and can prove you cannot pay the full amount. The IRS accepts roughly 25% of OIC applications, so proper preparation and documentation are crucial for success. The reduction amount depends entirely on your financial situation. If you have significant assets or income, you won't qualify for a dramatic reduction. However, taxpayers facing genuine financial hardship can often settle for 10-20% of their total debt, sometimes even less. The key is presenting a compelling case that shows paying the full amount would create financial hardship. This requires detailed financial analysis, proper documentation, and skilled negotiation—which is why working with experienced tax professionals significantly improves your chances of acceptance.

Question 3

What happens to collection actions while my Fresh Start application is being reviewed?

Accepted Answer

Most IRS collection activities pause once you're accepted into a Fresh Start program. If you're approved for an installment agreement, Offer in Compromise, or Currently Not Collectible status, wage garnishments and bank levies typically stop immediately. However, the IRS doesn't automatically halt collection just because you've applied. That's why it's crucial to act quickly and work with professionals who know how to protect you during the application process. We can often get collection actions stopped while your case is being reviewed. The protection continues as long as you comply with your agreement terms. Miss payments on an installment plan or fail to stay current on new tax obligations, and collection actions can resume quickly. This is why we help ensure you understand and can meet all program requirements before moving forward.

Question 4

How long does the Fresh Start Program application process take?

Accepted Answer

The timeline varies significantly depending on which Fresh Start option you pursue. Streamlined installment agreements for debts under $50,000 can often be approved within 30-60 days since they require minimal financial documentation. Offers in Compromise take much longer—typically 6-18 months from application to final decision. The IRS must thoroughly review your financial situation, and they often request additional documentation during the process. Complex cases involving business debt or multiple tax years can take even longer. Currently Not Collectible determinations usually happen within 60-90 days, while penalty abatement requests can be resolved in 30-60 days depending on the circumstances. Working with experienced professionals speeds up the process because we know exactly what documentation the IRS requires and how to present your case properly the first time.

Question 5

Will applying for Fresh Start relief hurt my credit score?

Accepted Answer

Participating in IRS Fresh Start programs does not directly impact your credit score. The IRS doesn't report installment agreements, Offers in Compromise, or Currently Not Collectible status to credit bureaus, so these programs won't appear on your credit report. However, tax liens can severely damage your credit—which is exactly why Fresh Start relief is so valuable. The program has increased the threshold for filing liens from $5,000 to $10,000, and offers lien withdrawal options once you enter qualifying payment plans. If you already have a tax lien, getting into a Fresh Start program can actually help your credit. Once you make three consecutive payments on a direct debit installment agreement, the IRS will often withdraw the lien, which can improve your credit score over time.

Question 6

What if I haven't filed tax returns for several years?

Accepted Answer

You must be current on all required tax filings to qualify for most Fresh Start programs. The IRS won't consider relief applications from taxpayers with unfiled returns because they can't determine your true tax liability without complete filing history. We help clients prepare and file all missing returns before pursuing Fresh Start relief. This often reveals that you owe less than you think, especially if you're entitled to refunds in some years that can offset amounts owed in others. Filing missing returns also stops the IRS from preparing substitute returns on your behalf, which typically result in much higher tax bills since they don't include deductions or exemptions you're entitled to claim. Getting compliant with filing requirements is always the first step toward meaningful tax relief.

IRS Fresh Start Program Prattville, PA