The IRS started the Fresh Start Program more than a decade ago to provide tax debt relief to taxpayers and resolve their tax debt. The taxpayers who owe taxes to the agency in 2024 can take advantage of the program and get free of their tax debt. The article covers everything about the program from its eligibility to various options for tax debt relief.
IRS Fresh Start Program
The Internal Revenue Agency started the Fresh Start Program in 2011 intending to provide relief to taxpayers who are struggling to pay their taxes and owe taxes to the agency due to unexpected circumstances. The program also helps the IRS to collect long-due taxes and improve the tax collection performance of the agency.
The program reduces the tax bill or provides various options to taxpayers to pay their taxes and avoid penalties. Over the years, the agency has introduced many options for tax payment and relief to ensure people struggling with their taxes can stay worry-free from adding interest, penalty, tax liens claims, and legal consequences.
The taxpayers can take advantage of this program even in 2024, so if you are struggling with your taxes, Fresh Start will be the best way possible to avoid the penalties, tax lien, and other consequences of not fulfilling your tax responsibility. Taxpayers who meet the eligibility of the program can avail the program to resolve their tax bill.
- IRS Tax Pro Account
- IRS Publication 502
- IRS Code 401 208A Hunting Rules
- 401k 2025 Contribution Limit IRS over 50
When can you apply for the IRS Fresh Start Program?
Taxpayers can apply for the IRS Fresh Start Program when they are struggling with taxes in the following situations:
- When you can’t pay full tax debt and can only pay a portion of it.
- When you wish to reduce your tax bill.
- When you can’t pay anything at all for now.
- When you face bankruptcy and a serious financial situation
The program has various solutions for taxpayers based on the above situation to offer some relief and pay their taxes.
Programs Available in the IRS Fresh Start Program
The IRS offers various programs for taxpayers to assist them with almost every situation that may be the cause of tax debt. Under the Fresh Start, the agency offers the following tax relief options:
- Installment Plan:
The IRS offers an installment plan to pay the taxes you owe. People who can pay only a part of their tax bill can use the installment plan. In the Installment plan, the IRS offers two plans when you qualify for the plan:
- Long-Term Plan: It applies to taxpayers who owe $50,000 or less in tax debt including penalties, tax amount, and interest. The plan allows the applicant to pay monthly taxes for up to 6 years. The taxpayers who have filed all their tax returns for at least 6 years.
- Short-term plan: The short-term plan applies to taxpayers who tax $100,000 or less with penalty, tax, and interest. Under the plan, the taxpayers have to repay the tax in 180 days or less.
- Particle Payment Plans:
The partial payment plans under the Fresh Start allow taxpayers to pay unpaid taxes in smaller amounts for a long duration with applicable penalties and interest.
- Offer in Compromise:
The Fresh Start allows OIC, where taxpayers can settle their taxes for less than they owe to the agency. The taxpayers who can’t pay taxes at all or doing so will create financial hardships for you. The OIC is applicable if you have filed your taxes, have a valid tax extension for the current year, are an employee & made tax deposits, not involved in bankruptcy proceedings.
Under OIC, the IRS approves the OIC when the agency believes the liability can be paid in a lump sum or periodic payment method.
- Penalty Abatement:
The initiative offers taxpayers a chance to minimize their tax penalties for late tax bill payments under specific criteria. Taxpayers can request the penalty abatement on the IRS website or visit local IRS offices.
- Temporarily Dekay tax collection: The taxpayers who tax and can’t pay taxes due to financial conditions can request the IRS to delay the collection and grant the “currently Non-Collectible Status.” However, taxpayers should understand the delay in debt collection does not mean that your penalties and interest will stop, it will continue to be charged on your debt.
The taxpayers can choose any of the above options to get tax debt relief according to their situation.
Who qualifies to apply for the IRS Fresh Start Program?
Taxpayers who meet the below general eligibility requirements qualify to apply for the Fresh Start program, however, each option has its own set of eligibility criteria:
- You plan to pay the taxes in the coming 6 years
- Your personal tax bill is $50,000 or less, for businesses the tax bill should be $25,000 or less
- You have filed tax returns for all the past years showing you have never failed to fulfill your tax liability. It also shows that you do not have any past record of tax debt.
IRS Fresh Start Program Application
Taxpayers with tax debt can initiate the Fresh Start program based on the program they choose as a tax debt relief. You have to submit the tax form associated with the concerned tax relief option and submit the documents proving your eligibility for the program.
For instance, taxpayers who wish to initiate OIC need to submit Form 433-A with a non-refundable fee of up to $205. Taxpayers can check Get help with tax debt on the IRS website to apply for the various tax debt relief options.
IRS strives to enhance tax collections as they provide tax debt relief to taxpayers through various options that fit well with their situation. Taxpayers can check the IRS’s official website and initiate the program to resolve their tax debt issue.