IRS Fresh Start Program: What Is The Fresh Start Tax Initiative?

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irs fresh start initiative

What is the Fresh Start Initiative?

The IRS Fresh Start Program is an umbrella term for the various tax debt relief options offered by the IRS. The IRS Fresh Start Program helps taxpayers who owe the IRS by aiding taxpayers with paying back taxes and avoiding tax liens. It is an payment plan. Changes implemented by the program largely revolved around tax liens, installment agreements, offers in compromise, and currently not collectible charges.

Is the IRS Fresh Start Program for me? The answer to this question will depend entirely on you and your circumstances for tax debt relief. Here’s some information on the IRS Fresh Start Program, who can qualify regardless of financial situation, what help the Fresh Start Initiative could provide you with, and how you can advantage of the fresh start program offered through the IRS!

Explanation Of The IRS Fresh Start Initiative

How Does The Program Work?

Tax Liens | Fresh Start Program

The IRS made changes to its policies regarding tax liens with the Fresh Start Tax Relief Program. Here are some of the changes summarized:

  • The FSI increased the tax debt threshold at which the IRS will file a Notice of Federal Tax Lien (Letter 3172). The threshold amount went from $5,000 to $10,000. It is important to remember that the IRS (at its discretion) can file a tax lien on someone below $10,000.
  • For The IRS Fresh Start Initiative, The IRS also made changes regarding the withdrawal of tax liens. These policy changes made it easier for individuals to take advantage of the Fresh Start Program to get “back on their feet,” and get a tax lien withdrawn in these specific ways:
    1. The lien was paid off or the statute of limitations (CSED) was reached. Although IRS liens are generally self-releasing, they don’t always come off. Therefore, a taxpayer in this situation needs to be in filing compliance for the past three years and in compliance with estimated tax payments (if a business or self-employed) before they can request a lien withdrawal.
    2. An individual can set up a 60-month direct debit installment agreement (aka DDIA or SIA) if their balance is $25,000 or below. Direct debit means that the IRS deducts an individual’s bank account or wages for the monthly payment. After three consecutive direct debit payments, the lien withdrawal can be requested.
    3. An individual with a regular installment agreement that is converted to a DDIA can request a lien withdrawal after 3 successful payments.


For more information on the IRS Fresh Start Program, please contact us for a free tax case review.

Installment Agreements | Fresh Start Program

With the Fresh Start Program, the IRS made installment agreement policy changes. Below is a summary of the changes they made for the Fresh Start Initiative:

  • The FSI increased the threshold for which an individual can qualify for a Streamlined Installment Agreement from $25,000 to $50,000.
  • The FSI also expanded the tax debt amount threshold for small businesses to qualify for a DDIA from $10,000 to $25,000. Small businesses can pay down balances above $25,000 in order to qualify for a DDIA.

For more information on the IRS Fresh Start Program, please contact us for a free tax case review.


Offer In Compromise | Fresh Start Program

An Offer in Compromise (also frequently referred to as an “OIC”) is an agreement made between you and the IRS that settles your tax liabilities for less than the total amount. Essentially, you can agree with the IRS that sees you pay some of your debt off, but not all of it. Generally speaking, with the Fresh Start Initiative, the IRS won’t accept an OIC claim if they believe you can pay your debts in full or through a payment agreement. However, suppose they take a look at your taxpayer’s income and assets and conclude that you are unlikely to be able to pay what you owe. In that case, they may be lenient and approve an offer in compromise – an alternative sum that is more reasonable and achievable. Of course, you will have to accept and agree to the request legally.

The organization has implemented these common-sense changes, taking a realist approach to real-world situations and helping struggling individuals resolve their tax problems in as little as two years. As opposed to the average of four or five years, it often took people to get back on their feet in the past, understanding financial hardships and reducing the need for wage garnishments and other collection actions.

Changes to the program include:

  • Revising the calculation for your future income
  • Allowing you to repay any outstanding student loans
  • Allowing you to pay state and delinquent taxes
  • Expanding your allowable living expenses (both in terms of categories and amount)


For more information on the IRS Fresh Start Program, don’t hesitate to contact us for a free tax case review.

Currently Not Collectible | Fresh Start Program

When a taxpayer is in this status, enforcement actions cease. Generally with the Fresh Start Initiative, the taxpayer will need to provide sufficient documentation to justify this status with the IRS. The Fresh Start Program made the process easier for individuals who owe $10,000 or less to qualify for a CNC by easing documentation requirements.

For more information on the IRS Fresh Start Program, please contact us for a free tax case review.

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Who Is Eligible For The


Individuals | Fresh Start Program

If you are an individual taxpayer and you are happy to repay the debts you owe in a series of installments with a direct payment structure, you could benefit from the IRS Fresh Start Program. This agreement gives qualified individuals the ability to pay off their taxes in smaller, more manageable amounts over a period of time, with limited penalties on tax liability.

The IRS will take into consideration your ability to pay, your current income and expenses, and any asset equity in determining what they believe you can reasonably repay.

Each option has a different procedure, qualifications, and application process.

You just have to meet the requirements listed below:

  • You owe less than $50,000 or you owe more than $50,000 but can reduce your debts to this amount before starting the program.
  • You can pay off your outstanding debt in less than 60 months.
  • Your tax return is filed and up to date.
  • This is the first time you’ve fallen behind on payments to the IRS
  • You will agree to a direct payment installment agreement
  • You will maintain the installment agreement, keep up to date with tax filings and will not incur further tax debt while you are paying your installments
  • You will file for OIC and are able to pay off the agreed Fresh Start Initiative settlement amount within 12 months.

As a first-time debtor, you may also be eligible for abatement of specific penalties. For example, if you owe less than $25,000 or you are able to reduce your debts to this amount before starting the program, you may also qualify to have a federal tax lien removed.

There are three repayment options under the program: an extended installment agreement, a tax lien withdrawal, and the offer in compromise.


For more information on how to apply for the IRS Fresh Start Program, please contact us for a free tax case review.


 Businesses | Fresh Start Program

If you are a business owner and your business owes taxes, you could also be eligible for the Fresh Start Program. In this scenario, you will need to meet the following requirements:

  • Your business owes less than $25,000
  • You will be able to repay the full amount within 34 months
  • Your business is up to date with current federal tax filings and payments
  • It’s the first time your business has fallen behind on payments to the IRS
  • You will also need to fill out a Form 433-A Collection Information Statement for Wage Earners and a Self-Employed Individual. For many taxpayers who operate small businesses, the qualified business income deduction can be an excellent way to reduce your income taxes.
  • The goal is to make the payments affordable so you can pay them on time without a financial burden.

Of course, we’ve only touched on the basics on the program. If you have any further questions, would like a firm answer in regards to whether you’re eligible for the program or not, or want to apply for the Fresh Start Initiative, don’t hesitate to get in touch with us! Whatever your personal situation may be, our qualified, experienced and friendly tax professionals will be able to guide you in the right direction.

For more information on how to apply for the IRS Fresh Start Program, please contact us for a free tax case review.