What Is The Irs Fresh Start Program And How Does It Work?

Tax troubles can cause stress and confusion, and the solutions to them aren’t always clear. To assist taxpayers, the United States government offers the IRS Fresh Start Program. For citizens who owe money to the IRS and can’t pay their balance in full, this program might just be the solution to your Louisiana tax resolution needs.



This program was created in 2011 by the United States Federal Government and has expanded since then. Coming out of a recession at that time, many taxpayers owed tax bills that were much higher than originally billed due to some predatory practices that allowed the IRS to use compound interest and other financial penalties that made tax bills balloon. This initiative was developed to allow people a way to reasonably repay their outstanding tax debt.


This program works to address the extensive interest rates, penalties, and extra fees the IRS sometimes imposes on citizens who owe federal taxes but aren’t able to pay in full. Rather than getting stuck in IRS debt that snowballs larger and larger, people can set up a reasonable relief or repayment plan. This allows the IRS to be paid the money they are due without American citizens having an out-of-control tax bill.

Determining Who Qualifies

To be eligible for the Fresh Start Program, you have to prove that paying your tax balance would cause significant financial hardship. There are various forms your relief might take depending on how severe your hardship is. The IRS has guidelines for how they determine what a significant financial hardship actually looks like, but it is up to the taxpayer or the taxpayer’s representative to actually prove that your tax bill will cause you financial hardship.

You could qualify for this program if you meet several conditions. First, you have to have filed up-to-date tax returns. This must be the first time you’ve fallen behind on tax payments. You must owe less than $50,000 or be able to get your amount due under $50,000 prior to beginning the program. You have to agree to an installment payment plan and make on-time installment payments. You must be able to pay off your balance within 60 months.

Business Eligibility

In addition to individual taxpayers, business owners may also be eligible for this program. Your business might qualify if you are less than $25,000 in debt, can pay your debt off in less than two years and ten months, and are up-to-date on tax filings. As with individuals, your business will only be eligible if this is the first time you are unable to pay your tax bill. You may be eligible for a reduction in some penalties, as well.


There are four main programs available through the Fresh Start Program. Not every taxpayer will be eligible for every program. Working with a tax professional and the IRS will help you determine which program is right for you. The four possible programs you could be offered include an installment agreement, offer in compromise, currently non-collectible status, and penalty abatement.

Installment Agreement

An installment agreement is a payment plan. If eligible, you will pay an agreed-upon amount every month to the IRS. Payments continue until you have paid your tax bill in full. Because you are showing the IRS you are willing and able to make payments, you will no longer receive tax collection notices or be in danger of additional penalties. You are required, however, to pay interest on your installment plan, and you will therefore pay more than originally owed.

Offer in Compromise

The offer in compromise (OIC) option allows taxpayers to pay back less than they actually owe. Because the IRS is not being paid back in full under this plan, it is more difficult for a taxpayer to qualify than for an installment agreement. Only taxpayers in very difficult financial situations may receive an OIC. Your assets and debts will be carefully examined to determine if you are eligible. You will be required to pay a non-refundable deposit if selected for this plan.

Currently Non-Collectible Status

When the IRS approves you for this particular status, it means they have agreed that you are currently unable to pay your tax bill due to financial hardship but that, given time, your financial status will improve. The IRS places a temporary pause on trying to collect its debt from you, allowing you a grace period during which you are able to improve your finances so that you can pay your bill. As with the other plans, the burden is on you to prove your financial hardship.

Penalty Abatement

A common way to end up with a tax bill you can’t pay is to have IRS penalties for non-payment pile up. These penalties can significantly increase your amount due to the point where the penalties themselves are the reason your tax bill is out of reach. Penalty abatement allows you to have these penalties waived so that your tax bill is more affordable. If you can prove significant financial hardship, you may be eligible for this form of tax relief.


To apply for this tax relief program, you’ll need to make sure you are up to date on your tax filings. This is referred to as being in tax compliance. You will then be asked for a number of financial documents and will need to complete an application online at the IRS website or file the appropriate IRS forms. The application process can be tricky, so your best bet is to contact a tax professional to help you cover the details and determine your best strategy.


The most important thing to do once you are approved for one of these methods of tax repayment is to make your payments on time, every time. Defaulting on an agreed-upon payment plan is certain to void your agreement with the IRS and cause you to be in a potentially worse situation than when you began. Call a tax professional if you are concerned about default.


In Louisiana, as in other states, it’s important to find an answer to the problem of tax debt before the debt gets out of hand. Defaulting on IRS debt can be devastating to your finances. Working with a tax professional is the best way to determine which program payment program is right for you. A professional can help you avoid damaging tax liens by contacting the IRS on your behalf to broker a satisfying resolution.

The IRS Fresh Start Program exists to help you, the taxpayer, get a handle on your tax debt. Geaux Tax Resolution LLC is the best place to contact when you get a notice from the IRS about taxes owed. Allow the profesionals at Geaux to negotiate with the IRS and come up with a plan that best benefits you. Contact Geaux Tax Resolution LLC for more information or as soon as you receive a tax notice in the mail. Let our 35 years of experience work for you!

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