The IRS Fresh Start Program

What Is The IRS Fresh Start Program?

The Fresh Start Program, also known as the Fresh Start Initiative, was established by the U.S. government in 2011. The Fresh Start Initiative Program offers tax assistance to a certain crowd of people who owe the IRS money. It is the federal government’s reaction to the IRS’s predatory methods, which include the use of compound interest and financial penalties to penalize people with unpaid back taxes.

If you don’t pay your IRS taxes on time, you could face penalties, interest, tax levies, tax liens, asset seizure, wage garnishment, and potentially result in the IRS taking you to court. In response to the IRS’s exploitative collection techniques, the government developed the IRS Fresh Start Program, which makes it easier for individual taxpayers and businesses to pay their back taxes.

The IRS Fresh Start Program provides taxpayers with more flexible repayment terms and initiatives that aims to resolve their tax liability without imposing penalties.

What's The Difference Between The Fresh Start Initiative And The Fresh Start Program?

In similar articles, you might see that the names “IRS Fresh Start Initiative” and “IRS Fresh Start Program” are mentioned which might cause some discombobulation. Although they are different terms, Fresh Start Program and Fresh Start Initiative are used interchangeably because they are the same thing. The program was introduced by the Federal Government in order for taxpayers who are qualified through hardships to get a fresh start and obtain tax relief on their federal back taxes

Variations of the term include IRS Fresh Start Program, IRS Fresh Start Initiative, Fresh Start Tax Relief Program, Fresh Start Tax Relief, Fresh Start Programs, and Fresh Start Initiative.

How Does The Program Work?

Let’s say a taxpayer owes the IRS $10,000 in unpaid taxes, plus compounded interest and penalties, over the course of several years. This taxpayer may be unemployed and unable to pay for electricity and other living expenses. They do not have the financial resources to pay the IRS $10,000, and they will very certainly never be able to return the amount owed to the IRS.

The IRS is prohibited from collecting more than a taxpayer is able to pay under the Fresh Start Program. This assists the taxpayer in reaching an arrangement with the IRS and allows them to pay a reasonable amount. The IRS’s key criteria for the interview is the taxpayer’s financial status. From there, the taxpayer will find out which of the four major tax relief programs they are eligible for through the Fresh Start Program:

  • Offer in Compromise

  • Installment Agreement

  • Penalty Abatement

  • Currently Non-Collectible Status (CNC)

Offer In Compromise

In short, an Offer in Compromise is a proposed settlement with the IRS. It typically involves paying off your tax debt for less than what you owe, but without filing for bankruptcy. The IRS will take into account factors like income and expenses when determining whether or not to accept an offer from you. You may also be able to combine the offer of compromise with other repayment options such as an Installment Agreement or Payment Plan.

Installment Agreement

Many people find themselves in debt because of their taxes. The IRS is not forgiving when it comes to unpaid tax debts, and the penalties for non-payment can be severe. While you may have been trying to avoid paying your taxes by delaying filing your return or failing to file at all, now that you owe the IRS money and are looking for a way out, an installment agreement might be what you need.

Penalty Abatement

This status suspends the collection of late-payment penalties and prevents levy/garnishment actions taken by the government when a taxpayer cannot pay their tax debt in full, or even at all. The government will also not attempt to collect any interest that has accumulated on your account since you first became a CNC account. This program is different from Currently Not Collectible, because penalty abatement suspends penalties and interest on the debt, whereas CNC is simply the IRS terminating their attempts to contact and seek collection from you.

Currently Non-Collectible Status (CNC)

The status of CNC is given to taxpayers who have been found unable to pay their outstanding tax debts by the government. The IRS collection process is temporarily halted when an account is labeled as CNC, which means no harassing letters or threatening levies will be sent. If the IRS determines that you are unable to pay any portion of your tax debt, your account may be marked as Currently Not Collectible, delaying collection until your financial situation improves. The fact that your debt is Currently Not Collectible does not mean it will go away; it just means the IRS has assessed that you cannot afford to pay it at this time.

How Do I Become Eligible For The IRS Fresh Start Program?

The IRS Fresh Start Initiative is not something you can just get into, you actually have to qualify for the program. Being eligible for the Fresh Start Program is determined based on the severity of your financial situation and your tax debt amount. Every taxpayer’s circumstances vary, which will dictate which of the Fresh Start programs will be an available option for you.

How To Apply For The IRS Fresh Start Programs?

Getting into the IRS Fresh Start Program to resolve, reduce, and eliminate back taxes is now easier than ever thanks to the newly improved eligibility requirements. Before being accepted, you must go through a brief financial interview with one of our tax specialists to see which program might be best-suited for you. To save some time, call in Mon-Fri during our office hours, 8 A.M. – 5 P.M PST. To get in contact with a specialist, click “Check Eligibility” below.