Question 1

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

Accepted Answer

The amount of debt reduction depends on your specific financial situation and which Fresh Start option you qualify for. Offers in Compromise can reduce debt by 90% or more for qualifying taxpayers who demonstrate they cannot pay the full amount without creating financial hardship. Installment agreements don't reduce the principal debt but stop penalties and interest from growing while you pay over time. Penalty abatement can eliminate thousands in additional fees if you qualify for reasonable cause relief. Currently Not Collectible status doesn't reduce debt but stops all collection activities until your financial situation improves. The key is having a tax professional evaluate your entire situation to determine which option provides maximum benefit. Many taxpayers qualify for multiple forms of relief that can be combined for the best outcome.

Question 2

What are the qualification requirements for the Fresh Start Program?

Accepted Answer

Basic qualification requires that you owe $50,000 or less in combined taxes, penalties, and interest, though you may be able to reduce higher debts to meet this threshold. You must be current on all required tax filings and able to demonstrate financial hardship or inability to pay without economic strain. Self-employed individuals may qualify if they show a 25% or more drop in income. You cannot be in an open bankruptcy proceeding or have unfiled tax returns for recent years. The IRS also requires that you haven't willfully attempted to evade taxes. Each Fresh Start option has additional specific requirements. For example, Offers in Compromise require detailed financial disclosure and have strict asset and income limitations. Installment agreements require proof you can maintain payments while meeting current tax obligations. Our evaluation determines exactly which programs you qualify for and which provides the best outcome.

Question 3

How long does the Fresh Start Program application process take?

Accepted Answer

Processing times vary significantly by program type and IRS workload. Streamlined installment agreements can be approved within a few weeks, especially for debts under $50,000 with automated processing. Offers in Compromise typically take 6 to 12 months for the IRS to review and respond. During this time, collection activities are suspended, giving you breathing room. Penalty abatement requests usually process within 2-4 months depending on complexity. Currently Not Collectible status can often be established quickly - sometimes within 30 days - when proper financial documentation is provided. The key is submitting complete, accurate applications the first time. Incomplete submissions cause delays and may result in rejection, forcing you to start over. Professional preparation significantly improves approval chances and speeds the process.

Question 4

Will the Fresh Start Program stop IRS collection activities immediately?

Accepted Answer

Yes, most Fresh Start applications trigger an automatic stay of collection activities while the IRS reviews your case. This means no wage garnishments, bank levies, or asset seizures during the application period. However, this protection only applies when applications are properly filed with all required documentation. Incomplete or incorrect submissions may not stop collection activities. Additionally, the IRS may still file tax liens during the review period, though they cannot enforce collection. If you're facing immediate collection action like wage garnishment or bank levy, we can often secure emergency relief within 24-48 hours by contacting the IRS directly. Time is critical in these situations - the sooner you take action, the more options remain available. Waiting until collection starts severely limits your negotiating position.

Question 5

What happens if my Fresh Start Program application is rejected?

Accepted Answer

Rejection doesn't mean you're out of options. Most rejections occur due to incomplete financial information, mathematical errors, or applying for the wrong type of relief. These issues can often be corrected and resubmitted. If your Offer in Compromise is rejected, you have 30 days to appeal the decision or provide additional information. Sometimes the IRS will counter-offer with different terms that might still provide significant savings. Installment agreement rejections usually indicate you need to propose lower payments or provide additional financial documentation. Even if one Fresh Start option doesn't work, you may qualify for different relief. For example, if your Offer in Compromise is rejected, you might still qualify for Currently Not Collectible status or a partial payment installment agreement. Professional representation is crucial during appeals because tax attorneys and CPAs understand exactly what the IRS needs to approve your case.

Question 6

Can I apply for the Fresh Start Program if I haven't filed recent tax returns?

Accepted Answer

No, you must be current on all required tax filings before applying for any Fresh Start relief. The IRS requires that you've filed all returns for at least the past six years, and some programs require complete filing compliance. If you have unfiled returns, that becomes the first priority. We can prepare and file these returns quickly, often using IRS transcripts and third-party records when you don't have complete documentation. Filing these returns may actually reduce your total debt if you're entitled to refunds or credits that offset what you owe. The good news is that once your filings are current, you can immediately apply for Fresh Start relief. Many taxpayers discover they owe less than expected after proper returns are filed, and some find they're entitled to refunds that eliminate their debt entirely. Getting compliant with filing requirements is always the fastest path to resolution.

IRS Fresh Start Program Siko, PA