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What Is A Fresh Start Program And How Can It Help Me With My Tax Debt? 

Dec 13

If you're behind on taxes, the IRS's Fresh Start Program may be able to help. This program provides taxpayers with more time to pay and makes payment arrangements more manageable. Here's a closer look at how the program works.

What Is The Fresh Start Program?

The Fresh Start Program is intended to provide taxpayers with a pathway to resolving the debt they owe to the IRS. It eliminates interest, and penalties, and reduces lien and levy amounts to bring taxpayers into a more manageable repayment arrangement that results in full payment of their outstanding tax obligations. This policy aims to ameliorate taxpayers who are struggling financially, rather than exacerbate the issue by penalizing them. This proactive initiative by the Federal government will provide individuals with the necessary means to pay back their debt without teetering into financial ruin.

How Can I Qualify for the Fresh Start Program?

If you're looking to qualify for the Fresh Start Program, it's important to know that the eligibility criteria can differ depending on your circumstances and the type of tax debt you owe. Broadly speaking, you need to meet one of two requirements: You must be self-employed and have experienced a 25% drop in income or, as an individual, have an annual income under $100,000; as a couple, your annual income must be below $200,000. Additionally, your tax debt balance needs to be less than $50,000 for you to apply for the program. Knowing these requirements beforehand can help make the process smoother when applying.

How Does The Fresh Start Program Work?

The four main programs available to taxpayers through the Fresh Start Program are:

Installment Agreement

The Fresh Start Program offers taxpayers the opportunity to pay their IRS debt in installments, rather than all at once. Under this program, installment agreements are available, which allow taxpayers to make monthly payments towards their overall tax debt until it is completely repaid.

Once you sign up for an installment plan with us, the IRS will no longer send you collection letters or charge penalties.

The IRS requires evidence that you're dedicated to repaying your debt through the Fresh Start Program, and though your monthly installments might fluctuate, they will still charge interest on the entire amount owed. Therefore, in the end, you'll pay more than what was originally due.

Offer In Compromise

An OIC is an agreement between a taxpayer and the IRS in which the taxpayer pays their tax liabilities, either entirely or partially. The IRS usually rejects an OIC when they believe that it can collect the full amount of taxes owed through a lump sum payment or payment plan. The IRS must accept all qualified OICs By law, to determine whether an offer in compromise is reasonable, and the income and assets of the taxpayer involved are considered.

Currently Not-Collectible Status

The Non-Collectible Status is a 'status' given by the IRS to taxpayers who cannot pay their taxes, as opposed to other Fresh Start tax programs which are more like forms of relief. In this status, tax liens, tax levies, wage garnishments, and IRS collection notices are not allowed. A taxpayer in "Currently non-Collectible Status" will avoid any problems with the IRS when attempting to get Fresh Start tax relief.

Penalty Abatement

Penalty abatement, a term the IRS uses for Fresh Start tax relief, is only possible if you can prove to them that you have a reasonable cause. You can request penalty abatement in person at any local office or by speaking with collections personnel; however, know that requests made locally are often capped at $100. The best part? Making these requests doesn't cost anything.

What Benefits Does The Fresh Start Program Offer?

If you qualify for this program then there are many benefits available to help make managing your tax debt easier. For example, if approved for this program then any fines or penalties associated with late payments will be waived and any collection activities such as wage garnishments will be stopped until after your payment plan has been completed.

In addition, interest charges will still accrue during this period but they will usually be much lower than before because they will now be based on a lower principal balance instead of including all penalties that were previously assessed against it. Furthermore, if approved then any liens placed against property owned by taxpayers may also be withdrawn once payments start being made under this plan.

Finally, those who qualify may also receive additional incentives such as up-front payment discounts or reduced interest rates throughout their repayment period depending upon their specific circumstances.


If you are struggling with paying off your tax debt then the IRS's Fresh Start Program may be able to help ease some of that burden by giving taxpayers more time and flexibility when it comes to making payments toward their obligations while also waiving certain fees and penalties associated with late payments.

Additionally, those who qualify could benefit even further by receiving additional incentives such as up-front discounts or reduced interest rates throughout their repayment period which can ultimately make all the difference when trying to manage large amounts of tax debt successfully over time. So if you think that this program could work for you then don't hesitate—contact a qualified professional today!