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What Is The IRS Fresh Start Program?

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Are you having trouble keeping up with your taxes? Are unpaid tax bills putting you in a financial hole that seems impossible to get out of? Thankfully, the IRS has an answer: The Fresh Start Program. This program was created by the IRS to help taxpayers like you who are struggling to meet their tax obligations and make payment arrangements with the IRS. Here’s what you need to know about this beneficial program, so keep reading!

Understanding The IRS Fresh Start Program

The IRS Fresh Start Program was presented by the Internal Revenue Service (IRS) in 2011 to offer assistance to those who have trouble with their taxes, providing tax relief. The program aims to provide eligible taxpayers with options to settle their tax debts and regain financial stability.

A. History Of The Program:

The IRS Fresh Start Program was launched in response to the economic downturn that began in 2008. With the recent job losses and decrease in income, a sizable number of taxpayers experienced hardships in settling their tax debts. This program was designed to assist taxpayers by giving them multiple choices for repaying their tax debts and averting harsher consequences, such as wage garnishments, liens, and levies.

B.Eligibility Requirements:

To be eligible for the IRS Fresh Start Program, taxpayers must meet certain requirements, such as being current with their tax filings, owing $50,000 or less in tax debt, and demonstrating that they cannot fully pay their tax debts. Additionally, taxpayers must be willing to commit to making timely payments toward their tax debts.

C. Benefits Of The Program:

The IRS Fresh Start Program offers various benefits to eligible taxpayers, including installment agreements, penalty abatement, and offers in compromise.

IRS Fresh Start Program Options

The IRS Fresh Start Program provides eligible taxpayers with various options to settle their tax debts and regain financial stability. Companies such as Ideal Tax offer power of attorney for taxpayers on complex cases depending on which program is qualified for the taxpayer. The program offers three primary options: Offer in Compromise, Installment Agreement, and Penalty Abatement.

Offer in Compromise:

An Offer in Compromise (OIC) is an arrangement between the IRS and a taxpayer to accept less than the total amount due on their tax debt. This option is available to taxpayers who cannot pay their tax debts in full and can demonstrate that paying the full amount would cause financial hardship.

To qualify for an OIC, taxpayers must submit an application, along with supporting documentation, and pay a non-refundable application fee. If the IRS approves the OIC, the taxpayer must pay the agreed-upon amount in full or in installments.

Installment Agreement:

An Installment Agreement (IA) is a payment plan that allows taxpayers to pay off their tax debts in smaller, more manageable payments over time. This option is available to taxpayers who owe $50,000 or less in tax debt and can demonstrate that they are unable to pay their tax debts in full.

To qualify for an IA, taxpayers must submit an application, along with supporting documentation, and pay a fee. The IRS will review the application and determine the taxpayer’s eligibility for an IA. If approved, the taxpayer must make timely payments towards their tax debt until it is paid in full.

Penalty Abatement:

Penalty Abatement is an option that allows taxpayers to reduce or eliminate penalties for failing to file or pay their taxes on time. Taxpayers who can demonstrate that they had a valid justification for failing to file or pay their taxes, such as an illness, natural disaster, or death in the family may qualify for Penalty Abatement.

To be considered one must submit an application with supporting documentation and take care of any remaining tax debt. The IRS will then review the request and decide if you are eligible to receive Penalty Abatement.

How To Apply For IRS Fresh Start Program

Applying for the IRS Fresh Start Program can be a complicated process. Fortunately, with the correct documentation and an in-depth comprehension of how to apply, it is entirely feasible for you to be successful.

A. Documentation Required:

In order to be eligible for the IRS Fresh Start Program, taxpayers must furnish essential documents that include:

  1. Proof of income, such as pay stubs, W-2 forms, and bank statements.
  2. To accurately assess your finances, it is important to have copies of tax returns from the past three years.
  3. Proof of expenses, such as rent, utilities, and medical bills.
  4. Submitting appropriate evidence to support a penalty waiver or Offer in Compromise is necessary and should include bank statements, financial accounts, and other proof of distress.

B. Step-by-step Application Process:

The following is a general outline of the application process for the IRS Fresh Start Program:

  1. Determine eligibility: To be eligible for the program, taxpayers must meet certain criteria, such as owing $50,000 or less in tax debt and being current with their tax filings.
  2. Choose an option: Decide which option is best for your individual circumstances, such as Offer in Compromise, Installment Agreement, or Penalty Abatement.
  3. Gather documentation: Collect all required documentation, including proof of income, tax returns, and expenses.
  4. Submit an application: Complete the necessary forms for the option you have chosen and submit them to the IRS, along with any required fees.
  5. Wait for a response: The IRS will review your application and determine your eligibility for the program. They may request additional documentation or information to support your application.
  6. Make payments: If your application is approved, you must make payments towards your tax debt as agreed upon in the program.

C. Tips For A Successful Application:

To increase the likelihood of a successful application for the IRS Fresh Start Program, taxpayers should consider the following tips:

  1. Consult with a tax professional: A tax professional can help you navigate the application process and ensure that you have all the necessary documentation.
  2. Be honest: Provide accurate and truthful information on your application and be prepared to back up any claims with documentation.
  3. Be proactive: Contact the IRS early on if you are having trouble paying your taxes. This can demonstrate your willingness to resolve the issue and may make the application process smoother.
  4. Stay organized: Keep all documentation and communication with the IRS in one place for easy reference.

Seeking the IRS Fresh Start Program may appear to be a daunting task, yet if armed with the correct paperwork and insight into the application procedure, one can apply productively. It is recommended that taxpayers solicit professional help from a tax expert and maintain full transparency every step of the way.

Limitations And Risks Of The IRS Fresh Start Program

If taxpayers fail to comply with the terms of the program, they could face serious consequences, including:

  1. Termination of the program: The IRS may terminate the program if taxpayers fail to make payments as agreed upon or fail to file tax returns on time.
  2. Increased penalties and interest: Ignoring the program can increase fines and extra interest fees, exacerbating your tax debt.
  3. Legal action: If taxpayers fail to comply with the program, the IRS may take legal action, such as seizing assets or garnishing wages, to collect the tax debt

It is important for taxpayers to understand the risks and consequences of non-compliance before entering into the IRS Fresh Start Program. They should also ensure that they can meet the requirements of the program and make payments on time.


The IRS Fresh Start Program can help with back taxes, but it doesn’t make the debt go away completely. While some may qualify for complete debt forgiveness, most will still owe something. It is a helpful resource that can provide financial relief in difficult situations, but it’s important to consult a professional who can guide you through the process and ensure the best option for individual requirements.

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