How To Be Eligible For The IRS Fresh Start Program - Allison Soares, Attorney at Law (2024)

FAQs

What do you need to qualify for the IRS fresh start program? ›

Fresh Start Initiative. For borrowers that have a defaulted loan where the default occurred prior to March 13, 2020, you may be eligible for the Fresh Start Initiative announced by the U.S. Department of Education (ED). Fresh Start offers an opportunity to get your loan status changed from “default” to “current.”

The IRS Fresh Start Tax Program: 2024. The IRS Fresh Start Tax Program, or the Fresh Start Initiative, was created in 2011 by the United States Federal Government. The American Fresh Start Program provides tax relief to select taxpayers who owe money to the IRS.

6 years - If you don't report income that you should have reported, and it's more than 25% of the gross income shown on the return, or it's attributable to foreign financial assets and is more than $5,000, the time to assess tax is 6 years from the date you filed the return.

How much will the IRS settle for? The IRS will often settle for what it deems you can feasibly pay. To determine this, the agency will take into account your assets (home, car, etc.), your income, your monthly expenses (rent, utilities, child care, etc.), your savings, and more.

It takes 4–6 weeks for most people to have their request processed and be transferred to their new non-default servicer. You'll get communications about your transfer by postal mail.

The IRS charges a fee of $186 to process your offer-in-compromise application.

This temporary program (ending Sept. 30, 2024) allows you to get out of default more easily and more quickly than normal methods. Over 6 million borrowers are eligible as of January 2024. Read on to learn about the ways Fresh Start could benefit you and how to sign up ASAP to take advantage of these benefits.

You can submit an offer on taxes owed individually and for your business. Here are the main reasons the IRS may agree to accept less than the full amount you owe: Doubt as to Collectability: This means you don't have enough income or assets to pay your balance due in full.

Does the IRS forgive tax debt after 10 years? ›

Background. Each tax assessment has a Collection Statute Expiration Date (CSED). Internal Revenue Code (IRC) 6502 provides that the length of the period for collection after assessment of a tax liability is 10 years. The collection statute expiration ends the government's right to pursue collection of a liability.

Applying for one-time forgiveness from the IRS

The IRS one-time forgiveness program, or first-time penalty abatement, is a good option if you received an IRS penalty and have a solid history of filing and paying taxes on time.

An economic hardship occurs when we have determined the levy prevents you from meeting basic, reasonable living expenses. In order for the IRS to determine if a levy is causing hardship, the IRS will usually need you to provide financial information so be prepared to provide it when you call.

Qualification Requirements For IRS Hardship Relief

To be eligible for the IRS Hardship Program, taxpayers must demonstrate that they are facing significant financial hardship and are unable to pay their tax debts. Taxpayers must provide documentation and evidence supporting their financial situation.

The IRS will automatically waive failure-to-pay penalties on unpaid taxes less than $100,000 for tax years 2020 or 2021. You're eligible for this relief if you meet all the following criteria: Filed a Form 1040 or 1041 tax return for years 2020 and/or 2021. Were assessed taxes of less than $100,000.

You may qualify to apply online if: Long-term payment plan (installment agreement): You owe $50,000 or less in combined tax, penalties and interest. You have filed all required returns. Short-term payment plan: You owe less than $100,000 in combined tax, penalties and interest.