The Internal Revenue Service (IRS) is an agency of the United States charged with the collection of taxes and administering the internal revenue code. The main body of federal statutory tax law of the United States. The duties of the IRS also include providing tax assistance to taxpayers and pursuing and resolving instances of erroneous or fraudulent tax filings. With headquarters in Washington DC, the IRS services the taxation of all American individuals and companies along with audits when necessary.

What is the IRS fresh start program?

The IRS Fresh Start Program is a program that is designed to allow taxpayers to pay off substantial tax debts affordably over the course of six years. Each month, taxpayers make payments that are based on their current income and the value of their liquid assets. By the end of six years, their tax debts should be paid off in full. This program simplifies the process of paying back hefty tax debts. It also helps people avoid many of the detriments of owing a tax debt to the IRS including: 

  •         Interest
  •         Penalties
  •         Tax liens
  •         Seizure of assets
  •         Wage garnishments


How does the IRS fresh Start Program work?


People who owe a tax debt of $50,000 or less to the IRS are qualified to initiate the fresh start repayment process at any time. The IRS initiated its Fresh Start Program in 2008 and expanded it in 2012 to ease the financial burdens of taxpayers who owe up to $50,000 in taxes. It is available to both business owners and individual taxpayers. The Fresh Start program makes it easier for individuals who owe back taxes to pay the IRS, without having a lien placed on a vehicle or home. Lien withdraws can be painful. 

This program has recently expanded to help more people struggling with tax bills. Fresh Start is not a program, but rather a series of changes that the IRS has made to the tax code to alleviate tax bills. The goal is to allow citizens to pay taxes without liens and excess fees. The IRS fresh start program is of many categories: 


Extended Installment Agreement: An extended installment agreement is designed for people who owe $50,000 or less to the IRS. It grants taxpayers up to six years to pay off what they owe without incurring additional penalties and interest. It also stops IRS collection activities like wage garnishments, tax liens, and seizure of assets. The payments that taxpayers make each month will be based on how much money they currently make along with the value of the assets they have at their disposal. The payments are designed to be affordable so taxpayers can make them on time and without financial difficulties each month. 


Offer in Compromise: For taxpayers who have demonstrated that they are unable to pay their tax bill in full, the IRS offers a Fresh Start Offer in Compromise. The Offer in Compromise program will need the assistance of a professional tax preparation service, as negotiating with the IRS to pay less than the full amount owed can be tricky.

Essentially, the taxpayer will show that paying the full amount of taxes owed will create an insurmountable financial hardship. In these cases, the IRS may forgive a portion of the amount owed. Usually, you’ll have to agree to direct withdrawal of installment payments from a bank account.


Tax lien Withdrawal: This repayment choice is available for taxpayers who agree to pay off their entire tax debt through a direct debit repayment option. Once they are set up on the direct debit repayment plan, taxpayers can formally request in writing to have the tax lien withdrawn from their accounts. 


How do I qualify for the IRS Fresh Start Program?

Essentially, the IRS will take into account a tax payer’s income, expenses, and whether or not the amount of money that they agree to accept from a reduced compromise will be greater than or equal to the amount they could realistically expect to receive from a taxpayer. The IRS will take into account future income as well.

Call us now and we will start the process to determine whether or not you qualify for the IRS fresh start program.