If you owe back taxes to the IRS, you may have heard about the Fresh Start Program. But what is it, exactly? And more importantly, can it help you?
Here’s a straightforward breakdown of what the program includes, who qualifies, and how to take advantage of it.
What Is the IRS Fresh Start Program?
The Fresh Start Program isn’t a single program — it’s a set of changes the IRS made starting in 2011 to make it easier for taxpayers to settle their tax debt and avoid aggressive collection actions like liens, levies, and wage garnishments.
The program expanded several existing IRS resolution options, making them accessible to more people. Think of it as the IRS lowering the bar for relief.
What’s Included in the Fresh Start Program?
The Fresh Start Program improved four key areas:
1. Offers in Compromise (OIC)
An Offer in Compromise lets you settle your tax debt for less than the full amount owed. Before Fresh Start, the IRS used a much stricter formula to evaluate these offers. Now, they use a more realistic assessment of your ability to pay, which means more offers get accepted.
2. Streamlined Installment Agreements
The IRS raised the threshold for streamlined installment agreements from $25,000 to $50,000. If you owe $50,000 or less, you can set up a payment plan without providing detailed financial documentation. The maximum repayment term was also extended to 72 months.
3. Tax Lien Changes
Under Fresh Start, the IRS raised the threshold for filing a Notice of Federal Tax Lien from $5,000 to $10,000. They also made it easier to get a tax lien withdrawn after you’ve paid off your balance or set up a direct debit installment agreement.
4. Penalty Relief
The program expanded access to penalty abatement, particularly for taxpayers who had a clean compliance history. If you’ve been compliant for the past three years, you may qualify for first-time penalty abatement — which can save you thousands.
Who Qualifies for the Fresh Start Program?
There’s no single application for the Fresh Start Program. Instead, you apply for the specific resolution that fits your situation. Generally, you need to:
- Be current on your tax filings — or willing to get caught up on unfiled returns
- Owe less than $50,000 for streamlined installment agreements (higher amounts may still qualify with additional documentation)
- Demonstrate financial hardship or inability to pay for Offers in Compromise
- Have a clean compliance history for first-time penalty abatement
How to Get Started
The IRS won’t reach out to you about Fresh Start options. You (or your representative) need to take the first step. Here’s what I recommend:
- Get your IRS transcripts pulled to understand exactly what you owe
- Review your financial situation to determine which program fits best
- File any missing returns — the IRS won’t consider most relief options until you’re in compliance
- Submit the right application — Form 656 for OIC, Form 9465 for installment agreements, or a written request for penalty abatement
Why Professional Help Makes a Difference
You can technically apply for these programs on your own. But the approval rates tell the story: the IRS rejects roughly 60% of Offers in Compromise filed without professional help. An experienced Enrolled Agent knows how to structure your case, present your financials accurately, and negotiate effectively with the IRS.
If you’re dealing with IRS tax debt and want to explore your Fresh Start options, schedule a free consultation or call me at (970) 455-2700. I’ll review your situation and tell you exactly which options are available to you.
