Who Qualifies For The IRS Fresh Start Program?

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Everything You Need to Know About the IRS Fresh Start Program

Few things in life are more stressful than being saddled with tax debt. No one wants the IRS to come knocking on their door with a hefty tax bill or a dreaded audit. Luckily enough for those of us who find ourselves with tax debt, the Federal Government of the United States deployed the Fresh Start program back in 2011. The IRS developed this initiative to provide tax relief to certain taxpayers who owed tax debt.

One of the main goals of the IRS Fresh Start program was to combat predatory collections practices, such as financial penalties and tax liens, used by the Federal Government to punish those with outstanding tax debts. Moreover, the IRS doubled the threshold required for the IRS to file a notice of a federal tax lien. Therefore, the IRS Fresh Start initiative allows for a more graceful approach to achieving tax debt relief while avoiding tax liens.

The IRS Fresh Start program offers a breath of fresh air to those of us who receive an unpaid tax bill and are already drowning in debts that we can’t afford to pay. Those with tax issues who are eligible to benefit from the IRS Fresh Start initiative may be able to reduce their tax debt by up to 90%. That amount of forgiveness can be life-altering by allowing eligible taxpayers to get back on track financially and begin to plan for a brighter and more secure future.

Let’s run through a crash course on what an IRS Fresh Start entails.

So, how does the Fresh Start program provide a Fresh Start?

The IRS Fresh Start program stipulates that the IRS cannot collect more than taxpayers can reasonably pay without sacrificing their basic needs, such as food, shelter, clothing, and utilities. The guidelines provided by the IRS Fresh Start program help broker an agreement between the IRS and taxpayers who qualify that doesn’t put them in a place of undue hardship. Each situation is evaluated on a case-by-case basis, considering the financial situations of the parties involved. By allowing you a more manageable way of clearing your tax debt, the IRS Fresh Start provides an opportunity to start fresh.

How can the Fresh Start program provide tax help?

With the Fresh Start initiative, there are multiple ways for more taxpayers under financial hardship to obtain tax relief. For example, forms can be filled out on the IRS website, or a call or email may be used to contact a representative for the IRS. If you are lucky, you may even have a local IRS office where you can meet with an agent in person to help determine if the Fresh Start program is for you. Tax professionals can move you through the process.

No matter what route you choose as best for you, once the IRS reviews your application, you will find out if you qualify and, if so, what your new far more affordable monthly payment will be.

The IRS Fresh Start program possesses the following features that aid in tax debt relief:

Installment Agreement:
An installment agreement allows qualified individuals to make monthly payments to the IRS. These payments are applied directly to reducing the determined tax debt until payments are no longer in arrears. The other good news is that once you are set up with installment payments under an installment agreement, you will no longer receive those nasty IRS collection letters, however, the IRS can and will still charge you interest on the amount of tax debt you owe. After making your third direct debit installment agreement payment and your tax debt balance is below or drops below $25,000, you will be in a better position to prevent or help remove federal tax liens. You must keep up with your monthly direct debit payments once you have an installment agreement established.

Offer in Compromise:
An Offer in Compromise, also known as an OIC, permits qualified taxpayers to settle on a reduced amount that the IRS will accept in place of payment in full on owed tax debts. Being able to qualify for this program is your best-case scenario. However, eligibility guidelines for this method of tax debt reduction are stringent and saved for the direst cases.

Currently Non-Collectible Status:
If an individual taxpayer is in dire straits and cannot afford to make any payments to the IRS for back taxes, they may qualify to get a status of “Currently Non-Collectable.” This does not absolve the person from debts owed but will halt collection activities.

Penalty Abatement:
The final Fresh Start program offering is known as “Penalty Abatement.” If the IRS determines that you meet a strict set of requirements, they may absolve you of the penalties associated with your delinquent payments up to $100.

Tax Lien Avoidance:
The Fresh Start program increased the amount a taxpayer needs to owe to $10,000 before a tax lien can be filed by the IRS. Under the right circumstances and depending on the outstanding debt, a tax lien withdrawal is possible.

How do I apply?

Documentation is critical when applying for relief through the Fresh Start program, as the Internal Revenue Service will need to see evidence proving your need for such assistance. Therefore, your best course of action will be to find all the supporting documentation to make a case for yourself. The documentation you may be asked to provide can include but is not limited to:

● Student loan statements
● Insurance claims
● Medical records and doctor statements
● Birth/Death certificates of immediate family members
● A personal letter of explanation as to your situation

Finally, all of your tax filings must be up to date before you can qualify to reap the benefits of the Fresh Start initiative. That means filing unfiled tax returns or incomplete returns and ensuring your current withholdings and estimated tax payments are correct.

The IRS Fresh Start initiative today

While the Fresh Start program saw expansion in 2012 so that more taxpayers could apply and qualify for tax relief, the most up-to-date adjustment to the program is an ease-up on the calculation of the taxpayer’s projected future income when an Offer in Compromise is considered.

The Fresh Start tax program continues to see record numbers of applications and, in turn, an equally impressive number of approvals. The economic hardships inflicted on many families during the ongoing Covid 19 pandemic further amplified this trend.

Many taxpayers are still struggling with financial woes as the pandemic winds down. The IRS is expected to continue its trend of lenient guidelines for a bit longer but this will be coming to an end.

If you or someone you know feels they may benefit from the Fresh Start program, now is the time to get your documentation in order so that you can apply and take advantage of all this program offers. The process can be confusing and overwhelming despite all that we have covered. We recommend contacting a tax professional who can help you through the complexities so that you can have the best chance of approval for your Fresh Start. Having tax experts on your side is the best way to help ease your worry and financial burden.


We provide professional guidance to people whose lives have been affected by tax problems. To evaluate your specific tax issue and determine if you qualify for tax relief, please contact us for a free consultation. We are COVID-19 prepared, we will work with you over the phone and via e-mail. The content of this post does not replace the advice of a licensed tax professional. Consult a qualified tax professional for questions specific to your circumstances.

Qualify for a IRS Fresh Start Program

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