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IRS Fresh Start Initiative

I was listening to the radio yesterday and heard an add for one of the big debt relief companies. They advertise the Fresh Start Initiative like it’s going to wipe out your tax debt and that’s a little misleading so I just wanted to give some practical, honest information about what’s available if you owe back taxes.


The IRS Fresh Start Initiative isn't a single program, but rather a set of options designed to help taxpayers who are struggling with unpaid federal taxes. It can help individuals and small businesses get back on track by offering ways to:

  • Make manageable payments: The initiative expands streamlined installment agreements, which allow you to break your tax debt into monthly payments. The threshold to qualify for this easier installment plan has been raised to $50,000 from $25,000, and the maximum repayment term is now six years instead of five.

  • Reduce penalties: Some taxpayers may be eligible for relief from failure-to-pay penalties.

  • Avoid forceful collection methods: The Fresh Start Initiative can help you avoid wage garnishments and bank levies by working out a payment plan.



There is something called an Offer In Compromise that you may have heard of. An offer in compromise (OIC) is an agreement between you and the IRS that settles your tax debt for less than the full amount you owe. It's an option to consider if you can't pay your tax liability in full, or if doing so would cause undue financial hardship. It is a lengthy process though and fees to have me handle it on your behalf start at $2500.



The IRS considers several factors when evaluating an OIC, including:


  • Your ability to pay: This involves looking at your income, expenses, and assets.

  • Doubt as to liability: This applies if you believe the amount you owe is incorrect.

  • Doubt as to collectability: This means you can't afford to pay the full amount owed. If the IRS accepts your offer, you'll need to agree to their terms, which typically involve:

  • Paying the agreed-upon amount in full by a certain deadline.

  • Filing all future tax returns and paying taxes on time for a set period (usually 5 years)

It's important to note that the Fresh Start Initiative doesn't eliminate your tax debt. Instead, it provides tools to make it more manageable. If you owe more than $50,000, you'll likely need to provide the IRS with more financial information to establish an installment agreement.


For more information on the Fresh Start Initiative and how to determine if you qualify, you can visit the IRS website at https://www.irs.gov/payments/get-help-with-tax-debt or call them directly. Be aware of phone scams - the IRS will never call you unexpectedly to demand immediate tax payment.

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