Question 1

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

Accepted Answer

The reduction depends on your financial situation, but results can be dramatic. Through Offers in Compromise, taxpayers often settle debts for 10-20% of what they originally owed. For example, if you owe $50,000 but your monthly income barely covers basic living expenses, the IRS might accept $5,000 to $10,000 as payment in full. The key is proving you genuinely cannot pay the full amount without creating financial hardship. Penalty abatement is another powerful tool. Since penalties and interest often make up 40-60% of your total debt, removing them can slash what you owe by thousands of dollars instantly.

Question 2

What if I owe more than $50,000 in back taxes?

Accepted Answer

You can still qualify for Fresh Start relief even owing more than $50,000. The $50,000 threshold applies to streamlined installment agreements, but you have other options. You might make a partial payment to reduce your balance below $50,000, qualifying you for the streamlined process. Or you can apply for regular installment agreements or Offers in Compromise regardless of the amount owed. The IRS evaluates larger debts based on your ability to pay, not just the amount. If your financial situation shows you'll never pay $75,000 or $100,000, they're often willing to accept much less through an Offer in Compromise.

Question 3

How long does the Fresh Start Program process take to complete?

Accepted Answer

Timeline varies by relief type, but most cases resolve within 6-12 months. Installment agreements are fastest, often approved within 30-60 days of submission. Offers in Compromise take longer—usually 6-12 months—because the IRS conducts thorough financial investigations. However, collection activity stops while your offer is being reviewed, giving you immediate relief from levies and garnishments. Currently-Not-Collectible status can be granted within 30-90 days if you meet hardship requirements. Professional representation dramatically speeds up processing time by ensuring all documentation is properly prepared and submitted.

Question 4

Can the IRS reject my Fresh Start Program application?

Accepted Answer

Yes, the IRS can reject applications, but rejection rates drop dramatically with professional representation. Most rejections happen because of incomplete paperwork, missing documentation, or unrealistic offers. The IRS has specific formulas for calculating acceptable Offers in Compromise. Offer too little based on their calculations, and they'll reject it immediately. Offer too much, and you're leaving money on the table unnecessarily. Professional representation matters because we know exactly what the IRS looks for, how to present your financial information favorably, and how to structure offers that get accepted. Our job is getting you the lowest legal settlement possible.

Question 5

Will applying for Fresh Start stop IRS collection activities immediately?

Accepted Answer

Yes, submitting certain Fresh Start applications automatically stops most IRS collection activities. When you apply for an Offer in Compromise, the IRS suspends levies, garnishments, and other enforcement actions during review. This protection lasts throughout the entire review process, which can be 6-12 months. Even if your offer is initially rejected, you have appeal rights that extend the protection period further. Installment agreement applications also provide collection protection, though not as comprehensive as Offers in Compromise. The key is getting your application submitted quickly and properly to trigger these protections immediately.

Question 6

What happens if I don't qualify for any Fresh Start options?

Accepted Answer

Even if you don't qualify for traditional Fresh Start options, solutions still exist. Currently-Not-Collectible status might be available if you're facing genuine financial hardship. Partial payment installment agreements allow payments based on what you can actually afford, even if those payments won't fully satisfy the debt before the collection statute expires. This effectively means paying less than the full amount owed. Bankruptcy might discharge certain tax debts under specific circumstances. The bottom line: there's almost always a solution. It's just finding the right strategy for your specific situation through a thorough consultation.

IRS Fresh Start Program Snows Mill, PA