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Key takeaways
- IRS Fresh Start isn’t a standalone program. Instead, it’s an umbrella term for different ways to handle tax debt.
- If you owe money to the IRS, you can enter into an installment agreement, offer in compromise, request not collectible status, or seek penalty abatement.
- Eligibility depends on your total debt, income, and whether your tax status is current.
You may have seen ads on TV or received fliers in the mail promising instant relief from tax debt through the “IRS Fresh Start” program. Although there are options for handling tax debt, that framing isn’t accurate. Fresh Start isn’t a single program, nor is it particularly new.
It’s been around since 2011, and it’s actually an umbrella term describing different paths to handle tax debt. Continue reading to learn about the different types of tax relief available and how to apply.
What is the IRS Fresh Start program?
In 2011, the IRS introduced the Fresh Start initiative to help taxpayers struggling with debt avoid heavy liens and collection activity. The government has expanded the program several times, broadening who is eligible and what relief looks like.
Under the Fresh Start program, the IRS typically won’t file a tax lien unless you owe $10,000 or more, up from a previous threshold of $5,000. And, Fresh Start relaxed the rules around offer in compromise settlements and how long taxpayers have to pay off what they owe with an installment agreement.
Who is eligible for IRS Fresh Start?
Eligibility depends on your debt and tax relief option:
Installment agreements or payment plans
With an installment agreement or payment plan, you’ll pay a fixed amount every month. There are two main plans:
- Short-term plan (180 days or less): This plan is for those who owe less than $10,000 and can pay off their debt in less than 6 months. There is no setup fee with this option, but there are penalties and interest charges.
- Long-term plan (181 days to six years): The long-term plan is a useful option for those with larger balances and who need more time to pay off their debt. Long-term plans involve setup fees, penalties, and interest.
For more information or to check your eligibility for the Simple Payment Plan, visit the IRS website.
Offer in compromise (OIC)
With an OIC, you can potentially settle your tax debt for less than you owe. OIC can be an option if you’re unable to pay your full tax liability or if paying what you owe would cause a significant financial hardship. The IRS considers several factors in determining your ability to repay, including your income, expenses, and assets.
To qualify, you must meet the following criteria:
- You’ve filed all required tax returns and made all required estimated tax payments
- Are not actively in an open bankruptcy proceeding
- You have a valid extension for a current tax year (if applying for OIC for the current tax year)
You can use the Offer In Compromise Pre-Qualifier Tool to check your eligibility for OIC.
Currently not collectible (CNC)
If you’re currently experiencing financial hardship and cannot pay your tax bill, the IRS may delay collection until your financial situation improves. The IRS will place your account in CNC status, which suspends collection activities. You still owe the balance of your tax debt, and penalties and interest continue to accrue.
You may need to complete a collection information statement form, and the IRS may ask for documentation to verify your income, monthly living expenses, and assets.
Penalty abatement
If you’re eligible for tax penalty abatement, the IRS will remove or reduce penalties. To qualify, you typically need to have a significant financial hardship and have consistently kept up with your tax applications in the past.
You can apply by contacting the IRS via the information listed on the tax notice it sent to you.
Related: The best tax relief companies of 2026: Which is right for you?
How to apply for IRS tax relief
Regardless of which program you’re considering within the Fresh Start initiative, follow these steps:
- Catch up with your filings: You typically must be current with your tax filings to qualify for any of the tax relief programs. You can file your returns, then pursue tax relief.
- Gather documentation: You may need to provide documentation for your income, assets, expenses, or financial hardships, so collect pay stubs, layoff notices, medical bills, and other documents.
- Use online tools: The IRS has several tools you can use to check your eligibility for tax relief programs online, such as the OIC Pre-Qualifier Tool. These tools can save you time.
- Apply through the IRS: Contact the IRS by phone or submit an application through its website for tax relief.
- Consider working with a tax professional: For more complex cases, a tax professional can be invaluable and provide personalized advice.
IRS Fresh Start Program and tax relief FAQs
Below are answers to some of the most common questions taxpayers have about IRS tax relief options.
Is the IRS Fresh Start program legitimate?
Yes, the IRS Fresh Start initiative was put into place in 2011. Since then, it has been expanded, and now the initiative covers several tax relief options, including installment agreements, offer in compromise, currently not collectible status, and penalty abatement.
Who qualifies for IRS Fresh Start?
In general, only those who are current with their tax filings qualify for most IRS tax-relief programs. The tax relief options you qualify for depend on your debt, income, expenses, and overall ability to repay your debt.
Can I settle tax debt for less than I owe?
Yes, in some cases, you may be able to settle your tax debt for less than you owe through an offer in compromise (OIC). The IRS allows eligible taxpayers to settle their debt for a lower amount based on their income, expenses, and assets.
