For individuals and businesses facing the burden of tax debt, the Internal Revenue Service (IRS) Fresh Start Program emerges as a beacon of hope — a pathway towards resolving tax issues and regaining financial stability. In this article, we explore the key components of the IRS Fresh Start Program, its eligibility criteria, and how it provides a fresh beginning for those seeking relief from tax liabilities.

What is the IRS Fresh Start Program?

Launched in 2011, the IRS Fresh Start Program is an initiative designed to assist taxpayers in settling their tax debts and achieving a fresh start financially. The program introduced changes to existing IRS policies, making it more accessible for taxpayers to resolve their tax issues and avoid the harsh consequences of unpaid taxes.

Key Features of the IRS Fresh Start Program

1. Expanded Installment Agreements: The Fresh Start Program expanded the eligibility criteria for streamlined installment agreements, allowing more taxpayers to set up monthly payment plans for their tax debts. Taxpayers with debts up to $50,000 can qualify for streamlined installment agreements without the need for detailed financial documentation.
2. Offer in Compromise (OIC) Changes: The program modified the Offer in Compromise (OIC) requirements, making it more realistic for taxpayers to qualify for a settlement. The changes included a more flexible approach to calculating the taxpayer's ability to pay and considering a broader range of expenses.
3. Lien Withdrawal: Taxpayers with a federal tax lien can request the withdrawal of the lien under certain conditions. Lien withdrawal allows individuals to clear their credit records and regain access to credit more easily.
4. Release of Levies: The Fresh Start Program introduced procedures for releasing levies on wages and bank accounts in specific situations. Taxpayers facing financial hardship may qualify for the release of levies to ease their financial burden.

Am I Eligible for the IRS Fresh Start Program?

In order to find out if you have the eligible criteria for the IRS Fresh Start program, see our checklist:

1. Tax Debt Amount: The Fresh Start Program is generally available to taxpayers with total tax debts of $50,000 or less. This threshold includes the total amount owed, including taxes, penalties, and interest.
2. Compliance with Tax Filings: To qualify for the program, taxpayers must be up to date with their tax filings. This includes filing all required tax returns for the most recent tax years.
3. Ability to Pay: Taxpayers must demonstrate an inability to pay their tax debt in full within a reasonable timeframe. The IRS will assess the taxpayer's financial situation to determine eligibility.
4. Willingness to Settle: Individuals applying for the Offer in Compromise must demonstrate a genuine willingness to settle their tax debt. This involves providing accurate and complete financial information to support the OIC application.

What are the Benefits of the IRS Fresh Start Program?

1. Reduced Financial Strain: The program offers taxpayers a more manageable way to address their tax debts through streamlined installment agreements, reducing the financial strain associated with lump-sum payments.
2. Improved Creditworthiness: Lien withdrawal and levy releases provided by the program can contribute to improved creditworthiness, enabling individuals to access credit more easily and rebuild their financial standing.
3. Opportunity for a Fresh Start: The Fresh Start Program provides a structured pathway for individuals and businesses to overcome tax challenges, settle debts, and embark on a new financial chapter.

Getting Tax Help from the IRS Fresh Start Program

The IRS Fresh Start Program serves as a lifeline for individuals and businesses grappling with tax debts, offering a realistic and structured approach to resolving financial challenges. By expanding eligibility criteria, introducing more flexible terms for installment agreements, and providing avenues for lien withdrawal and levy releases, the program empowers taxpayers to regain control of their financial destinies. For those burdened by tax liabilities, the Fresh Start Program represents not just an opportunity to settle debts but a pathway to a renewed financial future. Michael D. Peroo, CPA is your resource for tax planning and IRS assistance. Contact us today to discuss your eligibility for the IRS Fresh Start Program.