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IRS Fresh Start Program Changes Make It Easier to Apply and Get an Offer in Compromise

IRS Tax Fighters • Jan 21, 2022

If you’re a small business or an individual struggling to pay your taxes, the IRS Fresh Start program may provide some relief. The program, which was initially launched in 2011, has been expanded to help even more taxpayers. Offer-in-Compromise terms have also become more flexible, making it easier for people to get the relief they need.


The IRS Fresh Start Program Changes – What You Need to Know

The Fresh Start Program is designed to provide debt relief to taxpayers, making it easier for them to climb out of debt and penalties.


The program offers a way for taxpayers to settle their tax debts and avoid penalties. 

However, taxpayers must submit forms and documentation to start the process. 


Recently, the IRS has made changes to Fresh Start to allow more individuals and businesses to take advantage of it.


Changes to the program include:


• Revision of how future income is calculated

• Allowing taxpayers to repay student loans

• Allowing taxpayers to pay delinquent taxes at the state and local level

• Expanding the Allowable Living Expense allowance 
The IRS has also clarified how a dissipated asset will be included in a taxpayer’s calculation of reasonable collection potential.
 
In some cases, equity from income-producing assets will not be included in a business’s calculation of reasonable collection potential. 

What is an Offer in Compromise?
An offer in compromise, or OIC, is an agreement between the IRS and taxpayers to settle their tax liabilities for far less than the total amount owed.
 
The IRS generally won’t accept an OIC if the agency believes the taxpayer can pay the liabilities in full through a payment agreement or in one lump sum.

The IRS analyzes the taxpayer’s reasonable collection potential to determine whether an OIC will be accepted.
 
If you owe back taxes, our firm can help negotiate with the IRS and potentially settle your tax debt. Call us today. Our tax resolution specialists can navigate the IRS maze so that you are able to take full advantage of the changes made through the Fresh Start Program.

If you have outstanding tax liabilities and struggle to pay what you owe, the IRS Fresh Start Program may provide the relief you need to get out of debt and avoid further penalties. The new changes to the program allow more individual and business taxpayers to take advantage of programs like an Offer in Compromise. 

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