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 Fresh Start Initiative Programs

Are you curious about the IRS Fresh Start Program? We explain what it is, who qualifies and how it can help you get out of tax debt.


What is the IRS Fresh Start Program?

If you’re unfortunate to have a tax liability, you’ve probably curious about radio or TV ads (usually on late-night cable television) promoting the IRS Fresh Start Initiative.

You may be asking "what the heck is the Fresh Start Initiative?" "Can it really help me get out of tax debt?" What tax relief program is available in the way of IRS help?" "Am I qualified?" It may be a great time to have these questions answered.

What precisely is the IRS Fresh Start Initiative?

The Fresh Start Program isn't really all that new. In fact, if you search for the IRS Fresh Start Initiative on the IRS’s website, it gives you nothing on the subject. That’s because the Fresh Start Program goes back to 2011 when these newly designed rules focused on taxpayers who owed back taxes but had no federal tax liens filed against them. 

The IRS Fresh Start Program was designed to give taxpayers buried in tax debt a second chance to get themselves right, and it included:

  • Raising the dollar amount that triggered Federal Tax Liens being filed from $5,000 to $10,000 initially and then to $25,000 a few months later. These changes quickly resulted in fewer federal tax liens being filed.

  • Making it easier to have a tax lien released once the tax liability was paid off.

  • Withdrawing tax liens more frequently when an individual taxpayer entered into a Direct Debit Installment Agreement.

  • Making Installment Agreements (IAs) easier to obtain for small businesses.

  • Streamlining and expanding the qualifications of the Offer in Compromise (OIC) program to make it easier to qualify and use for more taxpayers.


Back in 2012, the IRS expanded the Fresh Start Initiative, making it available to even more taxpayers. Revisions included:

  • An easing of how the IRS calculated a taxpayer’s future income when considering an OIC.

  • Expanding what types and amounts of expenses (including allowable living expenses, student loans, and state and local tax debts) the IRS would consider reasonable and relevant when determining how much a taxpayer could afford to pay every month.

These changes saw the IRS taking a more realistic view of taxpayers struggling to pay their bills. While the program was still based on specific formulas, the IRS worked to include real-life situations.

Who is qualified for the IRS Fresh Start Initiative?

Individual taxpayers who will accept paying their tax debt over time through an installment agreement with a direct payment structure can benefit from using the IRS Fresh Start Initiative when:

  • The taxpayer owes less than $50,000 or can pay a larger liability down to that amount.

  • The tax debt can be paid off the remaining debt in 60 months or less.

  • It’s the first time falling behind on tax payments with the IRS.

  • The taxpayer agrees to the direct payment installment agreement

  • Their tax returns are up-to-date through the most current tax year.

  • They maintain the installment agreement, stay current with tax filings, and don’t incur new tax debt during the period the installment agreement is in effect.

  • They file for an OIC tax settlement and can pay the agreed settlement amount off within 12 months.

If a taxpayer can qualify for the IRS Fresh Start Program, certain bonus items may also come into play:

  • If a taxpayer owes less than $25,000 or can pay their initial liability down below that amount, they may be eligible for the withdrawal of a federal tax lien.

  • A first-time tax debtor is also eligible for an abatement of specific penalties under these revised guidelines.

For businesses, the IRS Fresh Start regulations are applicable when:

  • A business owes less than $25,000 and can be paid within 34 months.

  • Your business is current with federal tax filings and payments.

  • It’s the first time falling behind on tax payments with the IRS.

As a bonus for qualifying, a business may qualify for the abatement of specific penalties.

How can I learn more about the IRS Fresh Start Initiative?

That's really easy to answer. You can call the tax professionals at Flat Fee Tax Relief. You can take advantage of our free, no-obligation consultation. It could be the best 20 minutes you have ever invested your time in.

The IRS’ Fresh Start Program is a way to help businesses and individuals get real tax debt relief. But there are very specific parameters around the Fresh Start Program. It’s best to work alongside a trusted business advisor to help you understand whether you qualify and how you can benefit from the IRS Fresh Start Initiative.