IRS Fresh Start help
IRS Fresh Start Program: See If You Qualify for Tax Debt Relief
Fresh Start made it easier to pay the IRS over time, keep or remove a tax lien, and settle when you can’t pay in full. We find out which of those options fits you and handle the IRS from there.
- Payment plans
- $50,000 or less without a financial statement, and most people get up to 10 years
- Lien filing
- Generally not filed when the balance is under $10,000
- Lien withdrawal
- Possible at $25,000 or less on a direct debit plan
- Settlements
- An offer in compromise if you can’t pay in full
See if you qualify for Fresh Start
On this page
The short answer
See if you qualify for IRS Fresh Start relief
In one paragraph
The IRS Fresh Start Program is a set of changes the IRS made in 2011 and 2012 to help people with tax debt. It made payment plans available for balances up to $50,000 without a financial statement, raised the point at which the IRS files tax liens, made liens easier to withdraw, and expanded offers in compromise. There’s no single application: you use the option that fits.
One of the biggest uncertainties faced by IRS debtors is whether it is possible to pay these debts off without the IRS taking their wages, bank accounts or property. Fortunately, the IRS Fresh Start Program made that easier for a lot of people, with more flexible payment plans, lien relief and settlements.
Let’s look more into this program and see if it could help your tax debt situation.
What it is
Introducing the IRS Fresh Start Program
This is a specially-designed program that makes it possible for taxpayers to offset substantial tax debts conveniently. When it was expanded in 2012, payments could be spread over as long as six years. Today, the IRS says most people on a simple payment plan get up to 10 years. The debts are payable via monthly payments, and for larger balances the amount is based on the taxpayer’s income and assets. While a plan is in good standing, the IRS generally won’t seize assets or garnish wages, but interest and some penalties keep adding up until the balance is paid, and a lien can still be filed on larger balances.
The changes
What Fresh Start Changed
The IRS announced Fresh Start on February 24, 2011, and expanded it on March 7, 2012. These are the changes that still matter to people who owe today.
Bigger payment plans
The 2012 expansion doubled the balance you could put on a payment plan without a financial statement, from $25,000 to $50,000, and lengthened the term to 72 months. Today’s simple payment plans keep the $50,000 limit and give most people up to 10 years.
Fewer tax liens
Fresh Start raised the balance at which the IRS generally files a lien notice. The IRS’s own manual says it generally won’t file one when the balance is under $10,000, unless it needs to protect its interest.
Easier lien withdrawal
Liens can be withdrawn after the balance is paid, and for balances of $25,000 or less, after you switch to a direct debit payment plan and make three payments in a row.
Unemployment penalty relief
In 2012, people unemployed for at least 30 days got a six-month break on failure-to-pay penalties for their 2011 taxes. That relief was temporary and is no longer available.
How it works
How does IRS Fresh Start program work?
Most people use Fresh Start through one of the three options below, and the main payment plan covers balances of $50,000 or less. Although the IRS’s broader effort began in 2008, Fresh Start was announced in 2011 and expanded in 2012 to help individual taxpayers with up to $50,000 in tax debt and small businesses with up to $25,000.
The IRS Fresh Start Program also considers the difficulty that comes with tax debts repayment, for instance, unemployment. In 2012, IRS penalties could be waived for taxpayers who had been unemployed for at least 30 days, with a six-month grace period on failure-to-pay penalties for their 2011 taxes. That relief has ended, but penalty abatement for reasonable cause or a clean history is still available, and we request it for you when you qualify.
A common question
Is There an IRS Fresh Start Forgiveness Program?
You’ll see “Fresh Start forgiveness” in a lot of ads, but the IRS has no program by that name that wipes out tax debt. Most Fresh Start options help you pay over time. A balance actually goes down in three ways.
Offer in compromise
Fits whenYou can’t pay the full balance.The IRS settles for less than you owe when the offer is about the most it could collect from your income and assets.
Penalty abatement
Fits whenPenalties make up part of the balance.Penalties can be removed for a reasonable cause or a clean compliance history, which lowers what you owe.
The collection deadline
Fits whenThe debt is old.The IRS generally has 10 years from when a tax is assessed to collect it. Here’s more on whether the IRS forgives tax debt after 10 years.
Your options
What are the repayment options available under the IRS Fresh Start Program?
As mentioned earlier, there are three repayment options under the IRS Fresh Start Program. These repayment plans are designed to allow the convenient pay off of tax debts, according to the laws. They also protect people from the IRS’s harsher collection tools while they keep up with them.
Extended Installment Agreement
Fits whenYou owe $50,000 or less and can pay over time.The number one repayment option is the Extended Installment Agreement, targeted at people that owe up to $50,000 to the IRS. Defaulting taxpayers can spread their payment over as long as 10 years with this option (the IRS says most people qualify for that today), and IRS collection activities like the seizure of assets and wage garnishments will be put on hold. For larger balances, the monthly amount is based on the taxpayer’s income and liquid assets. Here’s how our installment agreement help works.
Offer in Compromise (OIC)
Fits whenYou can’t realistically pay the full balance.The OIC is not as popular as the Extended Installment Agreement. However, it is a viable repayment plan for taxpayers looking to pay off their IRS debts. What basically happens in an offer in compromise is that the taxpayer settles the tax debt for less than the original debt. The settlement, in some cases, can be considerably lower than the initial value of the tax debt.
The chances of getting an OIC approved is higher if the taxpayer makes a reasonable offer to the IRS. Such a proposal must be a clear reflection of the current financial situation of the taxpayer. Hence, it is advisable to work with a tax professional, who will prepare and submit an acceptable offer to the IRS on behalf of the taxpayer. A great offer, coupled with a well-prepared financial report, will increase the chances of the IRS accepting the offer promptly.
Tax Lien Withdrawal
Fits whenYou owe $25,000 or less and a lien has been filed.This repayment option allows taxpayers who owe $25,000 or less to pay off their tax debt completely via a direct debit repayment option. After setting up the direct debit repayment plan and making three payments in a row, the taxpayer can proceed to put a formal request (in writing) to withdraw the tax lien from their accounts. If the withdrawal is successful, the public notice of the lien is withdrawn. Here’s more on when the IRS files a tax lien and buying a house with back taxes.
It is advisable to work with a competent tax professional to determine which repayment option under the IRS Fresh Start Scheme is best for you. You may also commission your tax professional to file the required IRS forms and handle the application and setup of the best repayment option for you.
Getting started
How do you apply for the IRS Fresh Start Program?
There’s no single Fresh Start application. Each option has its own request, and they share the same starting point. However, you must ensure that all your back and current tax returns are correctly filed; otherwise, you will be ineligible for the program. Likewise, prospective applicants must resolve to submit all of their future returns promptly, after their admission into the Fresh Start Program.
You can save yourself the stress and complexity of the enrollment process by hiring Anthem Tax Services to assist you. Not only will we help file any back taxes you may have, but we will also determine the best repayment plan for you according to your situation and guide you to a successful application for the same. Our tax professionals know how to prepare and submit all the required information, including your income and asset value reports.
Your finances will ultimately get better if you can pay off your hefty tax debts. The IRS Fresh Start Program is a great avenue to settle your tax debts conveniently and at your speed. If you need help with the IRS Fresh Start Program, contact Anthem Tax Services for professional help in every aspect of the process, right from the application to the preparation and submission of your financial reports.
Working with Anthem
How We Handle Your Fresh Start Case
We find out where you stand
We file a power of attorney, pull your IRS transcripts, and confirm the balance, any liens on file, and which returns are missing.
We get you current
We prepare and file any back returns, since every Fresh Start option needs your filing to be up to date.
We pick the option that fits
We compare a payment plan, lien withdrawal and an offer against your income and assets, and look for penalty relief first.
We set it up and follow through
We request the plan or offer, ask for lien withdrawal or a levy release when you qualify, and stay on the case until it’s settled.
Who works your case
Our team includes Enrolled Agents who handle IRS collection cases. Billy Fauller, EA, was an IRS Revenue Officer from 2009 to 2017 and now represents taxpayers in collection cases and IRS negotiations. Tina Lyon, EA, has worked hardship determinations, offers in compromise, Appeals proceedings and Revenue Officer matters.
Payment plans they can afford and settlements are among the results clients write about on BBB, Trustpilot and Google. You can read Anthem Tax Services reviews and watch client stories before you call.
Find out which Fresh Start option fits you.
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Related Fresh Start Articles
Questions
IRS Fresh Start questions
Is the IRS Fresh Start Program still available?
Fresh Start isn’t a separate program you sign up for. It’s the name the IRS gave to changes it made in 2011 and 2012. The main pieces are still in place: payment plans for balances of $50,000 or less without a financial statement, lien withdrawal for direct debit plans of $25,000 or less, and offers in compromise. The 2012 unemployment penalty relief has ended.
Does the IRS Fresh Start Program forgive tax debt?
Not by itself. Most Fresh Start options help you pay over time. The ways a balance actually goes down are an offer in compromise, penalty abatement, or the IRS running out of time to collect, which is generally 10 years after the tax is assessed. We look at all three when we review your case.
Who qualifies for IRS Fresh Start?
It depends on the option. To get any of them, you generally need to have filed all required tax returns. A simple payment plan covers individuals who owe $50,000 or less. Lien withdrawal on a direct debit plan covers balances of $25,000 or less. An offer in compromise depends on your income, expenses and assets.
Will Fresh Start remove a federal tax lien?
It can. If you owe $25,000 or less, pay through a direct debit installment agreement that pays the balance within 60 months, and make three payments in a row, you can ask the IRS to withdraw the public lien notice. The IRS also generally doesn’t file a lien notice when the balance is under $10,000.
Can a Fresh Start payment plan stop a wage garnishment?
Usually, yes. The IRS must release a levy once you have an installment agreement whose terms don’t allow the levy to continue, and it generally won’t levy while a payment plan request is being considered. We request the plan and the release together.
Sources
Sources
- IRS News Release IR-2011-20: Fresh Start and major changes to the lien process (Feb. 24, 2011)
- IRS News Release IR-2012-31: penalty relief and expanded installment agreements (March 7, 2012)
- IRS: Simple payment plans for individuals and businesses
- Internal Revenue Manual 5.12.2, Notice of Lien Determinations
- IRS: Understanding a federal tax lien
- IRS: Offer in compromise
- IRS: How do I get a levy released?
- 26 U.S.C. 6502, the 10-year collection period
Free consultation
Want a fresh start with the IRS? Talk to us today.
Tell us what you owe and whether there’s a lien on file. We’ll tell you plainly which option fits and handle the IRS from there.
