Question 1

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

Accepted Answer

You may qualify if you owe $50,000 or less in combined taxes, penalties, and interest, though recent updates allow up to $100,000 for certain streamlined agreements. You must be current on all required tax filings and demonstrate financial hardship or inability to pay the full amount without economic strain.

Self-employed individuals in Sherman may qualify if they can show a 25% or more drop in income. The key is proving that paying your full tax debt would create genuine financial hardship. We evaluate your specific situation during your free consultation to determine which Fresh Start options you're eligible for.

Question 2

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

Accepted Answer

Yes, in certain cases the program can reduce tax debt by 90% or more through an Offer in Compromise. However, this isn't automatic - you must meet strict IRS criteria based on your ability to pay, income, expenses, and asset equity.

The IRS accepts your offer when it represents the most they can reasonably expect to collect from you. If you're facing genuine financial hardship and can demonstrate you'll never be able to pay the full amount, substantial reductions are possible. We've helped Sherman clients achieve significant debt reductions, but each case depends on individual circumstances.

Question 3

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

Accepted Answer

Once we establish representation and submit your Fresh Start application, the IRS typically suspends most collection activities. This means no new wage garnishments, bank levies, or asset seizures while your case is being reviewed.

However, penalties and interest continue to accrue during this period. The IRS also maintains the right to file tax liens in certain situations. The protection you receive depends on which Fresh Start option you're pursuing and how quickly we can get your application processed. This is why acting fast is crucial when you're facing IRS collection actions.

Question 4

How long does the Fresh Start Program application process take?

Accepted Answer

Timeline varies significantly based on which option you're pursuing. Streamlined installment agreements can be approved within 30-45 days if you meet all requirements. Offers in Compromise typically take 6-12 months for the IRS to review and make a decision.

Penalty abatement requests can be processed in 2-3 months for straightforward cases. Currently Not Collectible status can often be granted within 30-60 days if you provide complete financial documentation. Complex cases involving multiple tax years or business issues may take longer. We keep you updated throughout the process and push for the fastest resolution possible.

Question 5

Will I owe Pennsylvania state taxes if my federal debt is reduced?

Accepted Answer

Pennsylvania state tax obligations are separate from your federal tax debt. If you receive federal tax debt relief through the Fresh Start Program, you may still owe Pennsylvania state taxes on the same income periods.

However, Pennsylvania often has its own relief programs and payment options for taxpayers facing financial hardship. We can help you address both federal and state tax issues simultaneously. Many Sherman clients find that resolving their federal tax problems gives them the financial breathing room to handle state obligations more effectively.

Question 6

What documents do I need to apply for the Fresh Start Program?

Accepted Answer

You'll need complete financial documentation including recent pay stubs, bank statements, asset valuations, and monthly expense records. All unfiled tax returns must be completed and submitted before applying for most Fresh Start options.

We also need documentation of any financial hardship you've experienced - job loss records, medical bills, divorce papers, or business closure documents. The IRS requires detailed proof of your inability to pay before approving significant debt reductions. We help you gather and organize everything properly to strengthen your case and avoid delays in processing.

IRS Fresh Start Program Sherman, PA