What Is The IRS Fresh Start Program?
The Fresh Start Program is not a single resolution strategy, like an Installment Agreement or Offer-in-Compromise. Rather, it’s a series of changes implemented by the IRS to provide back taxes help for taxpayers.
Originally launched in 2008 and updated in 2012, this tax relief assistance initiative was developed partly as a reaction to the economic conditions created by the financial crisis of the late 2000s. The IRS amended four specific areas of IRS collection procedures and practices — tax liens, penalties, installment agreements, and offers-in-compromise (OICs) — in order to add more tools to the taxpayer’s toolbox.
How Does the IRS Fresh Start Program Work?
Navigating the changes brought about by the program can be a bit challenging to those without a background in taxation. Fortunately, the team at Boxelder Consulting is here to help.
We can show you how to take advantage of the Fresh Start tax relief program by cutting through the red tape and recommending the most advantageous tax strategies for you. The Fresh Start Program comprises four major changes in IRS policy, offering great opportunities for back tax assistance that you can use to your advantage:
1. Tax Lien Threshold Increased To Favor Taxpayers
The Fresh Start Program improves conditions for taxpayers by raising the threshold for IRS tax liens from $5,000 to $10,000. This provides taxpayers with some essential breathing room, but it’s important to remember that the IRS can still take other action to collect — such as a wage garnishment — before the $10,000 threshold is reached.
In addition to a higher threshold, the IRS has also offered greater access to lien relief. Upon request by taxpayers, liens can be removed once the full payment has been received. In some cases, taxpayers may be eligible for lien relief when they’ve made progress toward full payment. The IRS has also improved the turnaround time for review of lien relief requests.
- The Fresh Start Initiative increased the tax lien threshold from $5,000 to $10,000, and
- It expands access to tax lien relief.
2. Greater Access to Tax Penalty Relief & Forgiveness
The IRS can impose penalties for a whole range of infractions, such as failure to pay on time, failure to file on time, or having unfiled taxes. These penalties can be imposed for up to 40 percent of the total outstanding amount owed and can cause severe headaches for taxpayers attempting to pay back tax debt. However, through the Fresh Start tax relief program, taxpayers now have more access to forgiveness for these penalties.
- The IRS Fresh Start Program provides relief from some tax penalties.
- However, the IRS can still initiate other collection actions prior to a debt of $10,000
3. Easier Access to IRS Streamlined Installment Agreements
In many cases, taxpayers are not able to repay their entire tax debt in a single, lump-sum payment. The Fresh Start Program provides relief in these cases by providing easier access to installment agreements.
Now, if an individual or business taxpayer owes no more than $50,000, that taxpayer can automatically qualify for an installment agreement. However, the timetable for the payment plan can not expand past 72 months, or six years.
- The Fresh Start Program allows access to installment agreements for those who owe no more than $50,000
- The Installment agreement cannot last longer than 72 months.
4. Favorable Offers In Compromise From The IRS
The IRS Fresh Start program also makes changes to the offer-in-compromise (OIC) process. Now, the calculations used in the reasonable collection potential equation are more taxpayer-friendly. This means that more individuals will be able to utilize the OIC program, and the tax debts it satisfies can be repaid more quickly.
- The Fresh Start tax program makes adjustments to reasonable collection potential calculations that increase access to OIC relief.
IRS Fresh Start Program FAQs
The Fresh Start tax program provides many benefits to taxpayers who need relief from their tax debt. If you have back tax debt, you should contact the tax professionals at Boxelder Consulting for assistance. We can guide you through the details of the Fresh Start Program and help you pave the way toward a debt-free life.
Here are a few common questions on IRS Fresh Start that we hear from potential clients:
Does The IRS Have A Fresh Start Program?
Yes! The IRS first launched the Fresh Start Program in 2008 to provide improved debt relief options for taxpayers afflicted by the financial crisis. Since then, the IRS has continued to bolster the program. Boxelder’s expert tax attorneys have years of experience using IRS Fresh Start policies to secure favorable offers in compromise, installment agreements, penalty forgiveness, and tax lien removal for our clients.
How Do I Apply For The IRS Fresh Start Program?
The IRS’s Fresh Start Program is actually an umbrella term for a variety of tax relief options including offers in compromise, installment agreements, penalty abatement, and tax lien release. Since the qualifications for each of these policies vary, you’ll want to speak to a tax professional to consider your best options – or read through Boxelder’s tax relief resources to better inform your decision.
What Are The Requirements for the IRS Fresh Start Program?
The IRS created the Fresh Start Program to be inclusive to a wide range of taxpayers. The program offers several different relief options, each with different requirements. For example, here are the basic requirements for penalty assistance through the Fresh Start Initiative:
- Self-employed (1099 filing) individuals must prove a drop of 25 percent in net income.
- Single filers can’t make more than $100,000 per year.
- Joint filers can’t make more than $200,000 per year.
- Your total liability must equal $50,000 or less.
However, even if you don’t meet these requirements, the IRS still has plenty of tax relief options available to you – either through the Fresh Start program or other tax relief initiatives. Boxelder’s experienced tax lawyers can help you navigate the best relief strategy for your specific situation.
Is The IRS Fresh Start Program Legitimate?
Yes! After the financial crisis of 2008, the IRS needed a way to provide relief to affected taxpayers. The Fresh Start Program is a legitimate route for taxpayers to find real tax relief and become compliant with the IRS.