IRS Fresh Start

IRS Definition

The IRS Fresh Start program makes it easier for taxpayers to pay back taxes and avoid tax liens. Even small business taxpayers may benefit from Fresh Start. Here are three important features of the Fresh Start program:

  • Tax Liens. The Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien. That amount is now $10,000. However, in some cases, the IRS may still file a lien notice on amounts less than $10,000. Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a Direct Debit installment agreement.
  • Installment Agreements. The Fresh Start program expanded access to streamlined installment agreements. Now, individual taxpayers who owe up to $50,000 can pay through monthly direct debit payments for up to 72 months (six years).
  • Offers in Compromise. Fresh Start expanded and streamlined the OIC program. The IRS now has more flexibility when analyzing a taxpayer’s ability to pay. This makes the offer program available to a larger group of taxpayers.

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The IRS Fresh Start initiative expanded several programs to help taxpayers struggling with unpaid tax debt. The Fresh Start program increased the threshold to qualify for a streamlined installment agreement from $25,000 to $50,000, if the balance can be paid in full within six years (previously five years). Also, taxpayers can now avoid a tax lien filing with a direct debit installment agreement on balances between $25,000 and $50,000.

Another important change was to the offer in compromise program. Several changes meant more taxpayers can qualify for an OIC.

In addition, the IRS increased the threshold for filling a notice of federal tax lien from $5,000 to $10,000. Fresh Start also allows taxpayers to obtain a lien withdrawal once their balance is paid in full or if their balance due is under $25,000 and they agree to direct debits from their checking account for their installment agreement payments. This is an important change since having a lien can hurt a taxpayer’s ability to obtain loans, obtain credit, or sell property.

Learn about your options to address an unpaid tax bill.

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