The Fresh Start Initiative was created in 2009 and was initially called the IRS Fresh Start Program. While it’s been titled a “program,” the Fresh Start Initiative isn’t really a program. Instead, “Fresh Start Initiative” or “Fresh Start Program” is a blanket term for a variety of changes the IRS made to their policies and collection procedures.
These changes were designed to help taxpayers pay their outstanding tax debt in a more manageable way. There are features of the Fresh Start Initiative that can allow those with higher tax debts to pay back their debt through streamlined installment agreements or the Offer in Compromise program. Additionally, the changes made to IRS policy with the Fresh Start Initiative can sometimes help taxpayers avoid tax liens or have existing tax liens removed.
Long-term installment agreements may be available to taxpayers who have less than $100,000 in total tax debt (including penalties and interest) and have filed all their required returns. Those who owe less than $50,000 in total can apply online, while those who owe between $50,001 and $100,000 in total must apply through the mail or in person.
Generally, those who owe less than $10,000 will have their long-term installment agreement automatically approved if: they agree to pay their full balance within 36 months, they agree to pay and file on time in future tax years, they did not apply for other installment agreements within the last five years, they’ve filed all their tax returns, and they’ve had no late filings in the previous five years.
Those who owe between $10,001 and $100,000 in total must apply for long-term installment agreements and have their submission reviewed by the IRS before it can be approved. For those with higher debts, it’s advised that you work with a tax professional when attempting to set up a long-term installment agreement. A tax professional can help you to enter into an installment agreement that works for both your financial circumstances and IRS requirements.