Fresh Start Program: IRS Support

A fresh start can be good for many people, especially when it comes to finances. Given that the United States has about $527 billion in debt that stems from taxes, the Internal Revenue Service (IRS) is aware that some people may be having financial difficulties. As a result, they offer the Fresh Start Program as a relief opportunity to help people better manage their debts. In this article, we will show you how you could benefit from this program.

Understanding the Fresh Start Program

You might think of a single debt relief assistance opportunity when you hear about the Fresh Start Program for the first time. However, this is simply an umbrella term for the various IRS debt relief options. This program aims to give taxpayers assistance in managing their debt and any charges while staying within the law. When it comes to tax debt management, you have a variety of options. As a result, the perfect way to work on your debt will differ depending on your situation. When the IRS first started operating this program in 2011, it aimed to help taxpayers regain good status by offering debt relief options. This provided taxpayers with a chance to settle their tax burden without facing penalties like:

  • Wage Garnishments
  • Levies as well as Liens
  • Prison Time

Different situations will call for different solutions. For this reason, it’s crucial to contact a tax expert so that you can choose the best course of action for you. Options available through this program include:

What to Know About the Currently Non-Collectible (CNC) Program?

As a way to get out of paying taxes, people sometimes try to ignore the IRS. That is not the best way to deal with the situation. A CNC status might be a better alternative. The CNC tax program prevents your tax debt from being collected. For those who owe a lot of money to the IRS but are unable to make their payments, this is a fantastic choice.

This opportunity may not be available to all taxpayers, though. Those who qualify must be recognized by the State and the IRS. The State/IRS will only accept a taxpayer if their gross monthly income is under their acceptable expenses according to national standards. When you reach this limit, your financial records will show that you cannot make the required payments without experiencing hardship. For this reason, the collection of your debt gets halted.

Advantages of the CNC Program

The CNC program has a lot of advantages that can be really helpful for you. Nonetheless, the most important advantage is that individuals would be able to receive assistance with their tax payments. The collection of this debt will not be a concern for them. Aside from that advantage, another perk of this program is that the IRS (or state taxing authorities) will suspend wage garnishment, bank levies, and asset seizures.

The fact that you may never have to make a payment on the amount you owe once you enroll in this program is another big advantage of it. The statute of limitations on your debt will still be in effect while you are in CNC status. If your debt for back taxes reaches the 10-year statute, it can be considered not collective, which is known as the IRS Expiration of Statutes (CSED).

Important Notes to Keep in Mind

Even though this program might be helpful, there are some details that you should keep in mind. One of the most important things to notice is that only some of the taxpayers who apply will be accepted into this program. As a result, the application process can take a long time and may be complicated and precise.

Another thing to keep in mind is that, even if you may be able to avoid paying back your debt while enrolled in this program, it may not always be the case. Therefore you could still be responsible for all or even a part of the debt.

Moreover, the IRS will conduct financial reviews that happen periodically on taxpayers who are in CNC status. They can use this information to decide whether your financial status is in a position to make full or partial payments. You can lose your eligibility for the program if you don’t comply with IRS documentation requests.

Understanding the Installment Agreement (IA)

At the end of the year, some people may owe taxes that they may not be able to pay in full. As a result, they might face some problems, like fees, penalties, or even getting arrested! An IRS Installment Agreement (IA) can be useful in situations like these. The IRS and state taxing authorities frequently give taxpayers the choice of repaying their debt through installments and payment plans. This means that taxpayers have the ability to extend the deadline for making their debt payments.

Who is Eligible for an Installment Agreement?

People who are unable to pay their tax debt may be eligible for this option if they:

  • Are up to date on their tax returns.
  • Disclose their financial resources.
  • Can prove that they cannot pay the debt in full.
  • Demonstrate that they are unable to borrow the amount they owe from a lender.

How Does the Application Process Go?

In general, it is better to start the application process as soon as possible. The sooner you act if you owe money to the IRS, the less likely it is that you will have to deal with penalties and other consequences related to tax debt. An accountant or other tax expert can help you if you want to start the application process.

What is the Offer in Compromise (OIC) Program?

Taxpayers who want to settle their past-due taxes for less than what they owe can find help through the Offer in Compromise (OIC) program. This might be the best approach to reducing your debt. However, you should keep in mind that this program is not an available option for all taxpayers. So, you should appropriately understand how the application process works. The IRS only accepts fewer than half of the applications each year, even if you meet the requirements.

What to Expect While Applying for the OIC Program?

It may be better to have a tax specialist with you when submitting your application. They can give you the best advice and support on how to increase the possibility of getting the IRS to approve your application. In case you are interested in taking advantage of this opportunity, the IRS will only accept your application if you have filed all of your previous tax returns with complete compliance. In general, the IRS will review your tax returns for the past 6 years.

After you have completed your application, you must submit it. The IRS will review your current financial situation after you submit your application to figure out whether you will be able to pay back your tax debt. Although you could be asked for more details, you need to be able to provide the proper documents.

As we mentioned earlier in this article, the IRS accepts less than 50% of the applications. So, if your application is not accepted, you can submit an appeal. You should keep in mind that you have only 30 days from the date on your rejection letter to submit your appeal.

Penalty Abatement

It is common to get a penalty from the IRS. There is an automatic computer system that sends penalties to taxpayers. You may not be aware of how quickly penalties can rack up and increase an already large tax debt. If you are dealing with IRS penalties, you may get some help from penalty abatement. Like with every other option on our list, this one can be complicated, so it’s crucial to seek the assistance of a tax expert. Moreover, it is especially important to get expert assistance because the application for a penalty abatement will involve IRS terms, codes, and procedures that might be difficult for people who aren’t tax professionals to understand.

What You Need for Penalty Abatement

You will need to provide evidence of a reasonable cause as to why you were unable to handle your tax debt appropriately when addressing the penalty. Reasonable cause can take the following forms:

  • Fire
  • Natural Disaster
  • Disturbances
  • Having no Access to Records
  • Death of a taxpayer’s direct family member
  • a serious medical condition of the payer
  • A member of the taxpayer’s immediate family suffers from a serious illness

Whatever your reasonable cause of the poor management of tax debt, you will need to provide documents as proof of what you claim.

The Eligibility Standards and Application Process of the IRS Fresh Start Program

Now that you have learned about the many IRS Fresh Start Program relief opportunities, it is critical to understand your eligibility. Each option targets a specific group of taxpayers. This means that maybe one of them suits your situation more than the others. For this reason, you need to speak with a tax expert to determine which option is better for you.

However, one of the main challenges people encounter is getting these programs’ assistance while managing their current tax returns. The IRS requires taxpayers to be current on all tax returns for them to take advantage of the IRS Fresh Start program. Taxpayers must not only be current but also have the appropriate withholdings for the current year. The IRS imposes these standards to work on trust with taxpayers and hold them accountable. Among the program’s basic requirements are the following:

  • The annual income cap for single filers is $100,000.
  • Joint filers may not make more than $200,000 annually.
  • Self-employed individuals must demonstrate a 25% decrease in net income.
  • Before the end of the year, a person’s tax balance has to be less than $50,000.

There will be a separate set of forms for each relief option offered by the Fresh Start program. This is why you have to get the right eligibility form for the program you want to apply for. Make sure your answers are accurate and detailed while filling out forms. Having a tax expert assist you with the application process can also be very helpful, as previously mentioned.


Tax debt can be one of the challenges you have to deal with if you are a taxpayer. However, the IRS offers the Fresh Start Program to help you. The programs involve four different forms of support:

  • Currently Non-Collectible (CNC)
  • Installment Agreement (IA)
  • Offer in Compromise (OIC)
  • Penalty Abatement

It is usually better to contact a tax specialist to get some professional help. They can help you make the decision that is best for you, depending on your particular situation. Furthermore, they will help you with the application process and give you some useful tips. Remember: the sooner you start the application process, the better. It is time to lose your tax debt!