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IRS Fresh Start Program

Tax Tips

What is the IRS Fresh Start Program and do you qualify for an IRS Fresh Start?

The IRS Fresh Start Program is an actual set of IRS tax relief programs introduced and revised by the agency. Here is what you need to know in order to determine if the IRS Fresh Start Program is an option for you.

​The IRS Fresh Start Program is an actual set of IRS tax relief programs introduced and revised by the agency.  This includes a Lien Program, an Installment Payment Plan and an Offer in Compromise program.


What is an IRS Audit?

The IRS Fresh Start Programs are:

Fresh Start Lien Program - is a program designed to provide relief to taxpayers who have IRS tax liens filed against them.

Fresh Start Installment Agreement - is a program designed to provide taxpayers with a method to enter into an agreement to pay taxes over a period of time.

Fresh Start Offer In Compromise - is a program designed to provide relief to taxpayers that will not be able to pay the IRS the full amount of taxes due over a certain period of time.


Let's take a look at the nuts and bolts of the tax releif provide under each of these programs offered under the IRS Fresh Start Initiative.

IRS Fresh Start Lien Program

Fresh Start Lien Program

Having a Federal Tax lien against your property can be devastating. A lien is reflected on your credit report and also serves to hindering you in some cases to sell or refinance your home. It is part of the public record that shows interested parties that the IRS has a claim against you.

Here are some changes that the IRS has made under the Fresh Start Initaitve to ease the burden on some taxpayers:

The Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien.

  • That amount is now $10,000.
  • However, in some cases, the IRS may still file a lien notice on amounts less than $10,000
  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
  • Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
  • Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
  • Small business will need to enroll in an a Direct Debit Installment Agreement to particpipate

When a taxpayer meets certain requirements and pays off their tax debt, the IRS may now withdraw a filed Notice of Federal Tax Lien.

When the IRS withdraws the notice of federal tax lien, it abandons its secured-creditor standing. The withdrawal of the notice hat your tax debt has been resolved.

The lien itself is only released if the tax debt has been satisfied or our time to collect your liability has expired.

This form is normally used to request a withdrawal ...

IRS Fresh Start Installment Agreements

Fresh Start Installment Agreements

Generally, if you owe less than $50,000 to the IRS, you can get into a repayment agreement by providing financial information provided that you are able to fully repay the debt in five years. A taxper can enter into a traditional installment agreement or in some cases they are encouraged to use other options such as :

Direct Debt Installment Agreements

If the amount that you owe is $25,000 or less, the Internal Revenue Services may allow allow lien withdrawals if:

  • a taxpayers entering into a Direct Debit Installment Agreement.
  • a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.

Streamlined Payment Plans Also Provides Relieve for Small Business Owners

  • The IRS will also make streamlined Installment Agreements available to more small businesses.
  • The payment program will raise the dollar limit to allow additional small businesses to participate.
  • Previously, only small businesses with under $10,000 in liabilities can participate.
  • This has been changed where now Small businesses with $25,000 or less in unpaid tax can participate.
  • Small businesses will have 24 months to pay.
  • The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business.
  • Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less.

IRS Fresh Start Offer in Compromise

Fresh Start Offer In Compromise


Filing an offer is the initiation of legal action in which you are making a legal claim that you have a limited abability to pay the IRS

Allowing a firm to prepare this incorrectly for you can possibly lead to serious issues with the denial or acceptance of your filings.  It is also important to know that the IRS uses a standard formula for calculating an offer in compromise  in order to determine "Reasonable Collection Potential".

This is program the IRS changed reasonable collection potential calculations from multiplying your discretionary income by a more favorable factor. Filing an offer in compromise is not like filing a tax return.

Also keep in mind that when an offer in compromise is submitted, the statute of limitations on collections is tolled, which means that it stops running.


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5 Tax Tips when dealing with the IRS.

Tax Tips

5 Tips for Taxpayers Who Owe Money to the IRS

For those taxpayers who can’t pay their tax balance in full there are a few things that you can do on your own to deal with the IRS.

  1. Explore Payment Options - The IRS offers several ways for you to pay your bill, including online, by phone, and by mail
  2. Request Additional Time to Pay - Based on your circumstances, you may be granted additional time to pay your tax.  Additional time to pay can be requested by calling the IRS, using the phone number on your most recent IRS notice or letter.
  3. Check your withholding amounts - If you owe a large amount of tax, you may need to increase the amount of taxes being withheld from each paycheck you receive. Taxpayers who have a balance due year after year may want to consider changing their Form W-4, Employee’s Withholding.
  4. Check your Estimated Taxes - If you do not have taxes withheld from your income, you may need to make estimated tax payments. This may apply if you have income such as self-employment, interest, dividends or capital gains. It could also apply if you do not have enough taxes withheld from your wages. If you are required to pay estimated taxes during the year, you should make these payments to avoid a penalty.
  5. Stay Current with your tax filings -  Make an effort to file all required returns (even if you owe) and you also make an effort to remain current with estimated tax payments or withholding. 

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