The IRS Fresh Start Program is designed to help those who owe IRS tax debt manage their situation more effectively. Learn your options. When you find yourself in a position where you owe the IRS a substantial sum, addressing it swiftly is crucial. Waiting to deal with your tax debt is generally a bad idea. The longer you wait, the more interest and penalties you must pay.
But here’s the thing: “What if you could get a fresh start with the IRS?” Instead of going further into debt, you could pay off what you owe using the IRS Fresh Start Initiative Program.
What Is the IRS Fresh Start Program 2024?
The IRS Fresh Start Program is how the IRS helps struggling taxpayers. The IRS created the program in 2011 and expanded its offerings in 2012, so it’s been around for a few years. It isn’t magic. You still have to pay your back taxes. But the Fresh Start Initiative can help you avoid:
- Interest
- Penalties
- Wage garnishments
- Tax liens
- Seizure of assets
The bottom line is, the program can help you get right with the IRS faster than you could before because it expands eligibility for a tax debt settlement. And do you know what that means? More flexible terms allow more people to qualify for help with their outstanding tax bill.
IRS Fresh Start Initiative Program Repayment Options
The IRS Fresh Start Initiative Program isn’t anything you haven’t heard about before.
What is the fresh start program with the IRS?
It includes three options:
- An offer in compromise,
- extended installment agreement,
- and tax lien withdrawal.
“Essentially, it’s a combination of all these different options that people have available to them when dealing with the IRS,” said Sharif Muhammad, MBA, CPA, PFS, MST, and CFP®, and founder and CEO of Unlimited Financial Services, LLC.
Is it right for you?
If you’re worried about the IRS garnishing your wages, putting a lien on your home, or seizing other assets, a Fresh Start IRS installment plan can help.
It’s best if you owe the IRS $50,000 or less. You can take up to six years to pay your tax debt through monthly installments. Sometimes you can pay less than you owe. It’s called an Offer in Compromise (OIC). However, getting the IRS to agree to settle for anything but your full balance can be a challenge.
Offer in Compromise Mistakes:
Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents! So be sure to ask an expert for help.
An offer in compromise only comes into play if you’re down and out, for example, if you have very little assets, file bankruptcy, you’ve been laid off, or you’ve been incarcerated.
Sharif Muhammad
Finally, the last option is a tax lien withdrawal. But there’s a catch. It requires you to repay your entire tax debt through a direct debit installment agreement. Which is just like it sounds: “Your payments to the IRS come directly from your bank account.”
How Do I Qualify for the IRS Fresh Start Program?
You might think a Fresh Start IRS program that helps you get out from under your tax debt sounds too good to be true.
The IRS Fresh Start Initiative Program is the real deal!
There are a few requirements.
“The taxpayer must have filed all their required tax returns for the last three years and must be current with any estimated tax payments,” according to Canopy Tax.
You must also prove you can’t pay your tax bill in full and not be involved in an ongoing bankruptcy proceeding. The IRS doesn’t ask for much. The hardest part? If you’re behind on your past tax returns, getting up to date might not be easy. Otherwise, it’s a straightforward process. Hopefully we answered your question of, ‘How Do I Qualify For The IRS Fresh Start Program?’
What if You Owe a Substantial Amount in Back Taxes?
Many things can come into play when you owe a substantial amount in back taxes.
If you ignore the IRS or you’re not responsive to them reaching out to you, the IRS can garnish your wages, put a lien on your home, or file a federal tax lien against you.
Sharif Muhammad
There is hope. Setting up a payment plan can stop the collection action.
If you’ve been paying in good faith, but you hit a snag somewhere, the IRS can grant you a non-collectability status and give you a reprieve for a short period of time.
Sharif Muhammad
Plus, according to Canopy Tax, “The IRS Fresh Start Programs allow the IRS to withdraw a lien if the taxpayer has entered into a Direct Debit Installment Agreement.” Basically, it gives you some breathing room.
Quick tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later. We recommend you speak to an expert to see if you qualify for tax relief first.
IRS Fresh Start Program Reviews
We spent hours reading posted results from the IRS fresh start program initiative 2020. Based on customer IRS fresh start program reviews, the best we can say is, ‘You have a chance!’
One Reddit IRS Fresh Start Program Review claimed with quite a bit of documented evidence that they were able to save $27,000 thanks to the fresh start IRS initiative. Generally, the IRS fresh start initiative reviews tell of a lot of hard work and time if you choose to do-it-yourself but whether you choose a professional or go it alone, you may save thousands of dollars.
What’s Next?
If you owe tax debt, understanding your options and dealing with the IRS isn’t easy. Even with programs like Fresh Start, you might not want to do it alone. Don’t worry. There are professional tax debt relief companies that can help you every step of the way. Most offer a free consultation. That way, you can decide if it’s right for you before you fork over any of your hard-earned cash.
Whether you settle your tax debt yourself or seek professional help, one thing is for sure: “Putting it off will only make it worse.” It’s best to confront your tax debt head-on. Understand your options, ask a professional tax pro for help, and make a plan to put it all behind you.
