IRS Fresh Start Program: The Complete Guide

Tax debt serves as a burden unlike any other. But we bet we don’t have to tell you that. If you’re reading this right now, there’s a decent chance you found yourself looking for information on tax debt and tax relief. Because most of the time, when you need tax relief, it feels like you really needed it yesterday. IRS notices, wage garnishments, tax liens, and just the weight of knowing you’re facing a mountain of debt—they all leave an impact. And however you attempt to run away from a tax bill, you know you’ll likely never run fast or far enough to truly escape it. What you need is a fresh start. And what you may be looking for is the IRS Fresh Start Program.

The IRS Fresh Start program has helped thousands and thousands of taxpayers climb their way out of tax debt. To those who qualify, the initiative provides access to a range of tools and plans to get life back on track.

The IRS Fresh Start Program helps thousands of people each and every year out of tax debt. But the first step to taking advantage of the program is to understand it.

And understand it, we sure do. As a full-service tax representation firm who has helped provide tax relief to thousands of hardworking folks like you, we’ve seen just about every tax situation one can imagine. We deal with audits, tax filing, tax liens, wage garnishments, business taxes—and a lot more. And we’ve been around since 2001, long before the IRS Fresh Start Program was created. We’ve saved our clients millions on their taxes and we’re always up for a challenge.

But for many of our clients, tax debt is a challenge they’ve often never encountered before. And we believe the best tool you can have at your disposal—aside from an expert tax team—is information. So we’re here to walk you through the IRS Fresh Start Program from A to Z. We’ll cover what the program is and how you can qualify. We’ll also walk you through the application process and additional Fresh Start tips before answering some IRS Fresh Start FAQs.

You can do this. A fresh start is on the horizon.

What Is the IRS Fresh Start Program?

The IRS created the Fresh Start Initiative as a way of expanding assistance to those dealing with tax debt. The program has been around for over a decade, and has been expanded to loosen some of the restrictions for accessing various tax types of tax relief through the IRS.

Despite the name, the initiative isn’t a “program” like a college program or recovery program. Instead, it was an initiative by the IRS that made repairing your tax debt issues easier. Effectively, the program loosened—or eliminated—certain eligibility requirements. These include income thresholds, amount of taxes owed, and other details specific to tax liens, tax penalties, and repayment options.

Here’s a little-known tax secret: The IRS doesn’t want to make your life stressful and overwhelming and miserable. It just wants to collect its money. And though we imagine the IRS would prefer to only collect money through regularly withheld income tax and annual tax filing, that’s not the reality. So in many ways, it’s in the IRS’s best interest to make paying back tax debt as easy as possible. Hence, the IRS Fresh Start Program.

If you’re looking to get out of tax debt, the IRS Fresh Start Program has made the process a little bit more frictionless and your options more plentiful. And that’s something to celebrate.

Who Can Benefit from the Program

Of course, not every taxpayer or tax issue requires the assistance that this tax program can provide. So before you read further, take a moment to see if any of these tax situations sound familiar to you.

1. People Experiencing Financial Hardship

Ultimately, this group represents a relative catch-all for the types of taxpayers who might find themselves able to make use of the IRS Fresh Start Initiative. The program helps taxpayers find payment alternatives and opens up the qualification process to make it easier to get yourself squared away with a tax relief solution. So if you’ve been saddled with a tax bill—and you’re experiencing financial hardship otherwise—you might be in a position to tax advantage of the program.

2. Delinquent Taxpayers with Bad Credit

Did you know that tax debt can actually have an impact on your credit? It can, and not in a good way. For example, your outstanding debt can lead the IRS to place a tax lien on your property. And this can have a pretty hefty impact on your credit score. A bad credit score can make applying for a personal loan or a car loan nearly impossible. And it leads to higher interest rates if you do get approved. However, the IRS Fresh Start Program might help you get that tax lien removed and help your credit score to recover.

3. Those with Atypical Tax Issues or Circumstances

You really can’t lump all tax debt into one bucket. Plenty of unique, rare, and complicated tax situations result in lingering tax debt and the need for a fresh start. For example, identity theft can even affect your relationship with the IRS. Or, if you didn’t realize your spouse or former partner was hiding income from the IRS, you might need help getting out of your tax debt as an innocent spouse. If you find yourself in a sticky tax situation, you might have a chance of benefitting from the program.

4. People with Previous, Unresolved Experiences with Tax Relief

On occasion, taxpayers attempt to resolve their tax debts through various tax relief programs, but they still find themselves having trouble paying. Part of the IRS Fresh Start Program expands the repayment options available. Remember, the IRS wants its money. And that sometimes means striking a deal for a portion rather than waiting indefinitely for all of it. If you struggle with tax debt and other debt issues, the IRS Fresh Start Program might help.

Who Probably Can’t Benefit from the Program

While the IRS Fresh Start Program can help—literally—hundreds of thousands of taxpayers, it can’t help everyone. Get to know some of the situations it doesn’t serve as well. We’ll provide some recommendations for what to do, instead.

1. Small Tax Bills

You should take each and every tax bill seriously. Full stop. At the same time, not all tax bills require the same grand solutions. Especially with small, more manageable tax bills, you rarely need to pursue the tax relief solutions center to the Fresh Start initiative. For example, let’s say you forgot to change your withholding on your W-4 and ended up with an unexpected tax bill when it came time to file your taxes. If the total was about $1500 and you could only pay $250 right away, you probably don’t need to pursue the IRS Fresh Start Program. Unless, of course, you have a low income that you think won’t support repayment within a couple of months.

Instead, pay what you can now and file your taxes. This will minimize your penalties. Then, pay what you can, as quickly as you can—and file for a first-time penalty abatement. Contact a good tax relief team to help clarify the process.

2. Audits and Other Non-Tax Debt IRS Issues

Some tax issues can feel scary and serious, but don’t really apply to the Fresh Start initiative. And we imagine the most well-known of these is the tax audit. If you find yourself staring at an audit notice from the IRS, don’t panic—but don’t continue reading this article. Instead, check out this one.

For other tax issues, like IRS audits, you should get in touch with a tax professional. An expert tax team can help you navigate just about any tax problem you can think of, from tax audits to tax preparation, and yes, tax debt relief. So reach out to a tax audit pro and get help with the specific IRS issue you’re facing, instead.

3. IRS Criminal Investigations

Some IRS problems don’t involve audits, tax debt, or anything like it. Some are just plain criminal. Among its other ongoing work, the IRS criminally investigates money laundering, identity theft, corruption, and other fraud-related tax issues. And not one of them has anything to do with the IRS Fresh Start Program.

The IRS Fresh Start Program isn’t a get out of jail free card. Most normal tax issues you may experience as a taxpayer won’t catch the attention of the IRS Criminal Investigations professionals. But if you do, it’s best to get in touch with a tax attorney—and possibly another attorney—to help you understand the nature of the investigation and what’s at stake.

Qualifying for the IRS Fresh Start Program

While the IRS made qualifying for its tax relief programs a little easier via the Fresh Start initiative, that doesn’t mean you’ll automatically qualify. But if you meet certain qualifications, you’ll likely have a chance to access some of these programs without any trouble.

How Do I Qualify for the IRS Fresh Start Program?

In 2012, the IRS helped to clarify some of the qualifications for the IRS Fresh Start Program. Assuming you check the right boxes, you may have the option to take advantage of the program. And as a heads up, if you don’t meet all of these criteria, you can still typically pursue tax relief through certain programs. Just contact a tax relief company who can help you understand your options, negotiate your bill, and get you the most tax savings possible.

1. Your Tax Debt Totals Fall in the Right Range

Most tax debt relief programs kick in at a few thousand dollars. But through the Fresh Start initiative, the IRS expanded its threshold for installment agreements up to $50,000. So if you owe less than $50,000, you may be eligible to pay over a series of months or years. Getting yourself set up with an IRS payment plan can help put a halt on various IRS tax collection efforts, including liens.

If you owe quite a bit more than $50,000, don’t worry. There are plenty of tax solutions out there for you! For example, we’ve worked with individuals and businesses facing hundreds of thousands (or millions!) in back tax debt. Just give us a call, and we’ll go over your case and get started.

2. You Don’t Have a High Enough Income

Most of the big IRS tools for tax relief require some sort of proof that you just can’t pay. Often, that means your income is too low. And while your income plays a critical role in your eligibility for the IRS Fresh Start Program, the IRS takes other factors into consideration, as well.

Generally, you must prove that paying your entire tax debt would result in undue financial hardship. For instance, were you to pay your entire $12,000 tax bill now, taking that action would disadvantage your family in a substantial way. You might also qualify if your income suddenly reduced by 25% or more. This might happen for a number of reasons ranging from the economy to sudden layoffs, but the result remains the same.

If you can prove this to the IRS, they may grant you the opportunity to pay your tax bill in installments. Or, they might allow you an Offer-In-Compromise, which would lower your total bill.

3. You or Your Spouse Meet the Right Criteria

Jointly filed tax returns carry benefits and drawbacks. While you can access certain tax credits and deductions, you might also find yourself saddled with tax debt you didn’t know your spouse had! Fortunately, when it comes to tax relief, we do have some benefits we can highlight.

If your spouse qualifies for the IRS Fresh Start Program, you’ll likely qualify, too. Since your joint tax return effectively marries your incomes, your shared assets and other financial details like income may help you get access to tax relief through the IRS you might not otherwise.

4. You Comply with Typical IRS Rules

In most cases, your ability to access the IRS Fresh Start Program and its benefits hinge on how much you typically play by the IRS’s rules. By this, we generally mean you pay your taxes and you file your tax returns—or any other paperwork—as required by the IRS.

Let’s get more specific. First and foremost, you should file your annual tax returns. And you should do it accurately. When you find yourself squaring up against a tax bill, you can (and should) always check to see if you’ve ever missed a tax return or tax payment. If not, this could seriously help your chances of accessing some of the tax relief programs offered by the IRS.

Another thing to look out for: declared tax withholding. As a self-employed taxpayer, you need to make quarterly tax payments on top of your annual filing. Regular, maintained, and thoroughly documented tax withholding payments can help your chances of qualifying. This also applies to businesses, who withhold payroll taxes and pay them to the IRS. Thoroughly maintained documentation of this regular practice can give you an advantage should your business find itself in need.

All of these ladder back into your general history of tax compliance. The IRS can give certain advantages to those individuals and businesses who play by the rules of compliance. Scratch the IRS’s back, and the IRS may scratch yours.

An Important Note:

Your qualification for the IRS Fresh Start Program obviously comes on a case-by-case basis. We’re here to give you the basics—the most pressing information to help you understand the program and how you might qualify. We don’t know your specific tax situation, and as with most IRS-related things, the devil is often in the details. If you want a clearer understanding of whether or not you can rely on the IRS Fresh Start Program, you should get in touch via our free live chat.

Applying for the IRS Fresh Start Program

So, how does one apply to the program in the first place?

Well, it kind of depends on which of the initiative’s features you’d like to qualify for. So, the required info and documentation for an installment plan can differ from what the IRS needs to review for an Offer-In-Compromise.

And most of these tax relief options also require a different tax form. This means finding the way to your precise method of tax relief might become challenging. And despite all the information we’ve given you here, you might not even realize that a better tax solution exists for your specific situation! Ultimately, that’s why you should seek out additional help when pursuing the IRS Fresh Start Program.

Not only can an accountant or tax relief professional recommend the best path forward, but they will also review your finances and tax situation. This can result in a number of life-changing revelations. For example, we’ve worked with clients who—after reviewing their tax situation and filing past tax returns—completely eliminated their tax bill! We’ve helped transform tax debt into tax refunds accessed thousands in savings from tax deductions or tax credits.

Without a tax background, you aren’t best positioned to get out from under tax debt through the IRS Fresh Start Program. So reach out to someone who is, and see the results.

IRS Fresh Start FAQs

What if I’m not approved for the initiative?

If the IRS doesn’t approve your application for its tax relief initiatives, that likely means that by its assessment, you didn’t meet the qualifying criteria. So, your income may be too high. Or your tax debt total may be too low. Lots of individual things can come in between you and the program. However, that doesn’t mean you can’t get your own version of a fresh start!

If you’ve already tried and failed to apply for the initiative, reach out to a tax professional. They can probably give you a sense of where things went wrong as well as some of the next steps you can take. Perhaps your situation lends itself to the installment plan, instead! Or maybe you didn’t realize you forgot to file taxes a few years back! Get all your ducks in order, and then together, make a plan for tax relief.

What is an Offer-in-Compromise?

With an offer-in-compromise, or OIC, you can effectively eliminate your tax bill at a lowered rate. For instance, let’s say your tax bill came out to $43,000. With an OIC, you might get the chance to eliminate your debt while paying only $30,000. Of course, the exact savings and reduction is highly personal, but it can come as seriously good news when fighting your tax debt.

For a bit more information about the OIC, check out this video directly from the IRS. It dives a little deeper into the specifics.

What is a payment plan?

A payment plan, or installment agreement, allows you to pay off your tax debt in monthly or annual installments rather than in a lump sum. This can serve as a useful tool for those who want to pay their tax debt but who lack the money to pay it all at once. Depending on your tax total, you might even be able to finish paying your total tax bill within a few months! While many payment plans naturally take much longer to finish, this transforms your tax debt into something a bit more recognizable—much like a mortgage or personal loan.

You can learn more about IRS payment plans—and how to apply for one—in this IRS video. Of course, we’ve also written at length on the subject. We’d highly recommend you check that out before getting too far into the application process.

Get Your Fresh Start Today

Honestly, we kind of love the name “Fresh Start.” Because that’s exactly what it is, and how you should view resolving your tax debt. Because it doesn’t matter how you found yourself saddled with a tax bill.

It doesn’t matter whether you simply miscalculated, forgot to file for a few years, or you simply didn’t realize the magnitude of your tax situation before it was too late. You deserve a fresh start, and the IRS Fresh Start Program can give you the options you need to reimagine your financial future. All it takes is a decision to put yourself and your family first.

The road out of tax debt can be a long one. But with the Fresh Start initiative, it’s lined with hope. And you never need to go it alone. If you’re looking for a fresh start, then you deserve whatever help you need to achieve it. And trust us: The first day after eliminating your tax debt will be one of the best in your lifetime.

Interested in the IRS Fresh Start Program? Get all the answers you need from an expert tax team with decades of tax relief experience. Send us a quick message or question through our free live chat here.

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