Question 1

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

Accepted Answer

The reduction depends on your specific situation and which program you qualify for. An Offer in Compromise can reduce your debt by 90% or more if you meet the criteria for doubt as to collectibility—meaning you can't pay the full amount without creating financial hardship. Penalty abatement can eliminate thousands in penalties if you have reasonable cause, like job loss, illness, or business downturn. For many West Clifford taxpayers, penalties make up 25-40% of their total debt, so this relief is substantial. Installment agreements don't reduce what you owe, but they make payments manageable. Instead of the IRS demanding immediate payment of $30,000, you might pay $400 per month over six years.

Question 2

Do I qualify for the Fresh Start Program if I haven't filed returns?

Accepted Answer

You must be current on all tax filings to qualify for Fresh Start relief. This is non-negotiable—the IRS won't consider any payment arrangements or debt reduction if you have unfiled returns. We handle this step first. We'll prepare and file any missing returns, usually going back six years as required by the IRS. Yes, this might increase what you owe initially, but it's the only way to access the relief programs. The good news is that once we get you current, you immediately stop accumulating failure-to-file penalties, which are typically 5% per month. For someone with several years of unfiled returns, stopping these penalties saves significant money going forward.

Question 3

How long does the IRS Fresh Start Program process take?

Accepted Answer

Simple installment agreements can be approved in 30-60 days once we submit the application. These are for taxpayers who owe less than $50,000 and can pay the debt within 72 months. Offers in Compromise take 6-12 months because the IRS conducts a thorough financial investigation. They verify your assets, income, and expenses before deciding whether to accept your offer. During this time, collection activity stops. Penalty abatement requests typically get resolved in 2-4 months. The timeline depends on whether we're requesting first-time penalty abatement (faster) or reasonable cause abatement (requires more documentation and review).

Question 4

What happens if the IRS rejects my Fresh Start application?

Accepted Answer

If an installment agreement gets rejected, it's usually because the proposed payment is too low or the financial information doesn't support the request. We can resubmit with a higher payment or additional documentation. For Offers in Compromise, rejection often means the IRS believes you can pay more than you offered. We can appeal the decision or submit a new offer with different terms. The key is understanding why it was rejected and addressing those specific issues. Penalty abatement rejections typically happen when reasonable cause isn't properly documented. We can request reconsideration with additional evidence or explore other penalty relief options. Having professional representation significantly improves your chances of success on appeal.

Question 5

Can the IRS still take my assets while my Fresh Start case is pending?

Accepted Answer

Once we submit an installment agreement request or Offer in Compromise, the IRS generally suspends most collection activities. They can't levy your wages or bank accounts while your case is under review. However, they can still file a tax lien to protect their interest in your assets. A lien doesn't seize anything—it just establishes the government's claim. We can often get liens withdrawn once you're in compliance with your payment plan. If you're facing immediate collection action like a bank levy or wage garnishment, we can request a Collection Due Process hearing to stop the action while we work on your Fresh Start application. Time is critical in these situations.

Question 6

Should I try to handle the Fresh Start Program myself or hire a professional?

Accepted Answer

The IRS processes thousands of Fresh Start applications, and most get rejected because they're not prepared correctly. The forms seem straightforward, but the IRS has specific requirements for documentation and financial analysis that aren't obvious to taxpayers. For simple cases—like requesting a basic installment agreement when you owe less than $25,000—you might handle it yourself. But if you're dealing with business taxes, multiple years of debt, or financial hardship, professional representation is worth the investment. We know which arguments work with IRS agents and how to present your financial situation in the most favorable light. More importantly, we handle all communication with the IRS, so you don't have to navigate their bureaucracy or worry about saying something that hurts your case.

IRS Fresh Start Program West Clifford, PA