IRS Fresh Start Program 2024- Know Who is Eligible & How to Plan the Payments?

In case you are reeling under the pressure of the tax dues and inability to pay the taxes you owe, you can have a sigh of relief as you have got the access to the IRS Fresh Start Program. As its name suggests it is a program targeting to the taxpayers who owe a hefty amount of tax and could not pay it back in the specific time frame. The IRS Fresh Start Program was initiated by the federal government of US in 2011, and since then millions of the citizens who meet the necessary eligibility criteria get benefited from the program.

Under this program the individuals can get exemption from paying the whole amount to taxes owed or they get time frame to cover up the dues. Originally, the taxpayers receive time of 6 years to clear the dues in small amounts throughout this long period. Most of the individuals turn out to clear the dues in this time, if still some of them could not afford to clear the taxes they have to meet a different fate. Check out what you can do and what are other options to clear your dues in given time frame?

IRS Fresh Start Program

  • The Internal Revenue Service’s Fresh Start Program is helping the taxpayers who are struggling to pay their dues. Therefore the Fresh Start Program was started by the IRS which provides the individual taxpayers various mode of repayments for paying the dues. The individuals can choose either “penalty abatement” or “offer in compromise” to reduce their tax debt. Through the “penalty abatement” you can not only reduce the balance you owe initially but also prevents throwing away of the money on compounding interest on penalties. There are on income requirements to follow for availing the penalty abatement. You can opt out for this if the IRS is satisfied with your efforts that you have made to comply with the requirements of the law but is unable to meet your tax obligations due to complications beyond your control. For this you have to contact to the IRS for further monitoring on tax reduction.
  • Another option to reduce or either eliminates the dues is “offer in compromise” which not only can eliminate the interest and penalties but also eliminates the principal. Through this, you can get tax reductions as well as full exemption from the principal after the satisfaction of the IRS. On such condition that if you clear the tax debt, it may throw you in trouble and bring financial hardships along with. The tax officials will further assist you in eliminating the dues and your hardships as well.

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Title IRS Fresh Start Program
Initiated Year 2011
Accessible Taxpayers
Sponsored By IRS
Official Website

IRS Fresh Start Program 2024- Know Who is Eligible & How to Plan the Payments?

How to Plan the Payments

There are two ways available for you to design your payment plan to clear the tax debts as suggested by the IRS

  1. Partial pay installment plan
  2. Streamline installment plan

Partial pay installment plan

You can opt out for partial pay installment plan to clear the dues in smaller payments for over a period of time in equal installments. In many of the cases, this reduces the tax penalties and interest significantly by using “statute of limitations”. The statute of limitation is the expiration date of tax debt because the IRS has a limited time period for collecting the amounts.

Streamline pay installment plan

The IRS does not need additional information for approving these plans. It is a long term plan which allows the individual tax payers about 72 to 84 months to clear the tax debt. In long term tax plan, you can owe $50,000 or less including tax, interest and penalties while in short term tax plan you can owe $100,000 or less including tax, interest and penalties.

If the individual taxpayer has tax debt over $100,000, it becomes to put in place the suitable planning to opting out the best possible option for the reductions and exemption as per the case, in such case they care recommend to consult tax officials to avoid further penalties.

Tax Lien Withdrawal

Apart from getting options to choose between “offer in compromise”, “penalty abatement”, “streamline installment plan” and “partial pay installment plan”, you can opt out for Tax Lien Withdrawal. This option is available for the ones who are willing to pay the whole amount of debt in one direct debit repayment. For that the individual tax payers should give written instructions to the receivers for withdrawing the money from the bank accounts. And the withdrawn amount should not be reported to the credit bureaus.

Eligible Taxpayer for Fresh Start

  • Willing to pay the dues over a period of time in small and customized installments
  • Do not have any previous history with the IRS about the tax debt
  • Active for the current tax filing
  • Ready to pay as per the direct payment structure
  • Have not delayed the IRS payments earlier
  • Being able to clear the tax debt in less than 72 months
  • Do not have the debt more than $50, 000 and willing to follow the procedure
  • Agreed to pay as per the final agreements and not incurring any additional debt by falling behind in paying the finalized installments

If you are a first time tax filer, the IRS can reduce the debts and penalties as per the norms.

If the federal tax debt is less than $25,000, you can also withdraw federal tax lien.

If the businesses and the individuals have been unemployed for a month or more and also obliged to pay the tax debts, they can get following relaxations

  • In such case the debt should be lower than $25,000 including penalties, interest and principal
  • They are obliged to repay the dues in the period of 2 years and 10 months
  • They do not have previous history where they fell behind in clearing the debt
  • They also have always made sure that they have been up to date with the federal tax filing
  • Sometimes, the IRS reduces the debts as part of qualifying bonus for the businesses and individuals

Apply for the IRS Fresh Start Program by visiting its official website and check out what is in store for you.

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