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  • dave rosa


Updated: Feb 12



One phrase often used in late night cable television advertising that catches people’s attention is the “IRS Fresh Start Initiative.”  What is the Fresh Start Initiative?  How can it help?  Is it as miraculous as the advertisements claim it to be?

The truth is that the Fresh Start Initiative is not all that new. It actually goes back to 2011, but at that time is was referred to as the Fresh Start Program. The initiative/program was initially implemented with the objective of providing taxpayers with a first-time tax liability an opportunity to make things right again by providing expanded tax relief programs toward securing voluntary resolution.  The initiative offered a more streamlined path toward reducing outstanding tax liabilities in a more affordable manner while also reducing the number of federal tax liens filed by the IRS in order to lessen the negative impact on credit scores.  Here is what you need to know about the most important aspects of the Fresh Start Initiative as well as how these tax relief programs might work to your advantage.


Under the guidelines of the Fresh Start Initiative, the IRS increased the threshold dollar amount that resulted in a federal tax lien being filed on individuals.  The amount went from $5,000 to $10,000 to the present amount of $25,000.  This change dramatically reduced the number of federal tax liens filed, which in turn reduced the negative impact that an outstanding tax liability had on a taxpayer’s credit score. Furthermore, the Fresh Start Initiative both eliminated and streamlined some of the internal bureaucratic rules and regulations, which allowed for the discharge of already filed federal tax liens to be expedited once an outstanding tax bill was paid in full. The Fresh Start Program also simplified the process for discharging already filed federal tax liens on personal income tax liabilities, provided that the outstanding income tax liability was reduced to below $25,000 and provided that the taxpayer had made several reoccurring monthly payments under an established Direct Debit Installment Agreement.


The Fresh Start Initiative also encourages direct debit payments as the IRS found these types of payments to be more efficient. Directly debited payments were found to reduce the potential of a default of an Installment Agreement as the payments became automatic, thereby reducing human error in accidently forgetting to make the agreed upon payment by the agreed upon due date.  The Fresh Start Initiative, as it is applied to Installment Agreements, has slowly evolved.  At first the IRS provided a more streamlined process toward securing resolution of a personal tax liability of $25,000 or less by way of a payment agreement.   Of course, certain preconditions were required to qualify, such as being in complete tax compliance with all required payments, and having all required returns filed.  Complete tax compliance has always been and, more likely than not, will always continue to be a prerequisite toward securing voluntary resolution.  The IRS then modified the criteria to allow the streamlined resolution process to apply to taxpayers with a personal tax liability of $50,000 or less to be paid within the lessor of 5 years or the number of months necessary for the liability to be satisfied in full by the Collection Statute Expiration Date (or “CSED”), provided that it was the first time the taxpayer fell behind with their taxes.   The agency has also slightly extended the time frame to the lessor of 6 years or the number of months necessary for the liability to be satisfied in full by the CSED, provided that a Direct Debit Installment Agreement was secured.   Most recently, in 2018, the IRS implemented a pilot program that provided a streamlined pathway toward resolving a personal tax liability of $50,000 to $100,000 with an Installment Agreement that paid the liability in the lessor of 7 years or the Collection Statute Expiration date.  This pilot program was initially set to expire in September 2018, but fortunately it did not expire at that time. While the pilot program has not yet officially been codified and made permanent, for the time being, it does appear that some IRS collection agents are continuing to follow its guidelines. The Installment Agreement portion of the Fresh Start Initiative does apply to business liabilities, but it is not as lenient as it is with personal tax liabilities.  It provides a streamlined path for businesses toward securing an Installment Agreement provided that the outstanding tax liability is $25,000 or less, and provided that the liability is paid in full within the lessor of 2 years or the Collection Statute Expiration Date. You need to know this: the IRS always wants to accomplish two (2) goals. One goal is to collect money. The most important goal is to close a file. An Installment Agreement accomplishes both goals but being placed into Currently not Collectible status and an Offer in Compromise will also accomplish their goals.


Similar to Installment Agreements, the Fresh Start Initiative made an Offer in Compromise (#IRSsettlements) a viable option to even more taxpayers by modifying the financial analysis standards as it pertains to monthly expenses and equity in assets.  An Offer in Compromise is a method of settling an outstanding IRS tax liability for less than the full amount when it can be thoroughly demonstrated that paying the liability in full will create a severe financial hardship to the taxpayer.  The IRS will consider approval of a doubt as to collectability Offer in Compromise when the taxpayer can demonstrate that, after taking into consideration net monthly income (income minus allowable expenses) and realizable equity in assets, that the offered amount is the IRS’s best collection potential. There are three subcategories for a tax settlement (#OfferinCompromise) with the IRS.  These categories are doubt as to liability, doubt as to collectability, and effective tax administration. The vast majority of Offer in Compromises that are submitted to the IRS fall into the doubt as to collectability category (concentrate on this) as this category encompasses situations where the taxpayer can demonstrate that they do not have the ability to resolve the outstanding tax liability in full through equity in assets or ongoing monthly payments based on net monthly income within the time frame that the IRS has to collect.  Consequently, this article will focus on how the Fresh Start Initiative has impacted Offers in Compromise based on doubt as to collectability. The IRS approves approximately 42% of the yearly Offer in Compromise submissions. This is mainly due to taxpayers attempting a "Do It Yourself" (DIY) settlement. Flat Fee Tax Relief has a 96% Offer in Compromise

Rate of Success. IN CONCLUSION

The Fresh Start Initiative has been a lifeline toward securing favorable IRS tax resolution for many struggling businesses and individuals who have outstanding tax liabilities. It is important to understand that an Offer in Compromise is not a one-size-fit-all solution, and that most taxpayers will qualify, however many do. Taxpayers need to beware that there are some disreputable tax relief companies who will promise a screaming deal tax settlement to just about anyone, regardless of whether they qualify. So, do your homework. Be sure not to overpay for IRS tax debt help.

This article was written by the tax professionals at Flat Fee Tax Relief who, for more than a decade, have provided valuable IRS tax debt help from coast to coast at a very affordable fee. Our teams are strategically located in Clearwater, Florida, and San Diego, California. This allows our tax pros to be available from 8 A.M. Eastern to 6 P.M. Pacific time. This allows our tax professionals the extra time needed to stop an IRS levy in one day.






#freshstartinitiative #IRSfreshstart #IRSfreshstartprogram

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