What’s the IRS Fresh Start Program?

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The IRS Fresh Start program helps taxpayers reduce tax debt and set up manageable payment plans. The program allows qualifying small business owners and individuals to receive penalty relief, negotiate installment agreements and sometimes reduce overall liability.

Under the Fresh Start program, the IRS has increased the minimum amount taxpayers must owe before the IRS filed a lien against their assets. Citizens can now owe up to $10,000 in unpaid taxes, penalties and interest before they receive a lien notice—although in some cases the IRS can still file over smaller amounts.

Another change is that taxpayers no longer have to pay off the full amount before a tax lien is removed. Once they’ve paid enough that the remainder of the debt is less than $10,000, they can request that the IRS release the lien by filling out Form 12277, also known as an Application for Withdrawal.

Fresh Start and Installment Agreements

Often individuals and small businesses can’t afford to pay their tax debt all at once. Now individuals who owe up to $50,000 have the option of making direct debit payments for up to six years, reducing the amount of individual payments, so they are more manageable.

To qualify for an installment agreement, the IRS may require you to show financial statements to prove you can’t pay your bill all at once, but in many cases this requirement can be waived.

Fresh Start for Offers in Compromise

One of the biggest benefits of the Fresh Start program is a change that allows taxpayers to negotiate their debt, so they no longer have to pay the full amount: Citizens may be able to have a portion of their debt wiped out.

Fresh Start also gives the IRS more flexibility in how they evaluate a taxpayer’s ability to pay, making it possible for more taxpayers to qualify. The IRS usually accepts offers that are a reasonable representation of what the taxpayer can manage after evaluating their income and assets.

If you’re facing an IRS debt, you don’t have to go it alone. Highland Tax Group is here to help: Contact us to receive expert advice today.