One of the biggest uncertainties faced by taxpayers who owe the IRS is whether it’s possible to pay off what they owe without being hit with costly penalties or interest. Fortunately, it is possible — thanks to the IRS Fresh Start Program, which allows you to resolve your tax obligations conveniently.

Let’s take a closer look at the program and see if it could be a solution for your current tax situation.

Introducing the IRS Fresh Start Forgiveness Program

This specially designed program makes it possible for taxpayers to resolve substantial tax balances in a manageable way. The payment is spread over six years, allowing the entire balance to be paid off in full over time. Payments are made monthly and based on your current income and the value of your available (liquid) assets.

In addition to making repayment more feasible, the IRS Fresh Start Program also helps protect you from interest charges, penalties, tax liens, asset seizure, and wage garnishment while you’re participating in the plan.

How Does the IRS Fresh Start Program Work?

You can initiate the Fresh Start process once your balance with the IRS reaches $50,000, by selecting one of three available repayment plans. Though the program began in 2008, it was expanded in 2012 to support both individual taxpayers and businesses that owe up to $50,000 in back taxes.

The IRS Fresh Start Program also accounts for hardship situations — for example, if you’ve been unemployed for over 30 days, you may be eligible to request a six-month extension and have IRS penalties waived.

What Repayment Options Are Available?

As mentioned earlier, the IRS Fresh Start Program offers three repayment options. These plans are designed to help you pay off your outstanding balance under fair terms, while protecting you from additional penalties or enforced collection actions.

1. Extended Installment Agreement

This option is available to individuals who owe up to $50,000. It allows you to pay off the full amount over six years through monthly payments. While enrolled, IRS collection activities — like garnishments, tax liens, and asset seizure — are put on hold. Your monthly payment amount is determined based on your income and liquid assets.

2. Offer in Compromise (OIC)

An Offer in Compromise allows you to settle your tax obligation for less than the full amount owed. While less commonly used than installment agreements, it can be a highly effective option for those who qualify.

To increase your chances of approval, it’s crucial to present a well-prepared offer that reflects your financial reality. Working with a qualified tax professional can greatly improve the likelihood of a successful outcome, as they can help you compile a compelling financial report and submit the proper documentation.

3. Tax Lien Withdrawal

This option allows taxpayers to repay their entire balance through a direct debit plan and request that the associated tax lien be withdrawn. Once the repayment plan is in place and the formal request is approved, the lien will no longer appear on your credit reports — which can help preserve or improve your credit score.

As with the other options, it’s highly recommended to consult a tax professional to determine the best strategy for your situation and ensure proper handling of all paperwork.

How Do You Apply for the IRS Fresh Start Program?

The IRS has made applying for the Fresh Start Program relatively straightforward, but there are important qualifications:

• All current and prior tax returns must be filed

• You must commit to staying compliant with all future tax filings

• Your outstanding balance should be within the eligible range

Once your returns are filed, you can apply online at IRS.gov using the Online Payment Agreement tool or by submitting IRS Form 9465.

To save time and reduce stress, you can have Five Star Tax Resolution assist with the entire process. We’ll help you get current on any past filings, choose the most appropriate plan, and handle the application and supporting documentation — including income verification and asset reports.

Resolve Your Tax Balance with Confidence

Paying off a significant tax balance doesn’t have to feel overwhelming. The IRS Fresh Start Program gives you a structured and manageable path forward.

If you’d like help applying or determining which repayment strategy is right for you, contact Five Star Tax Resolution today. We’ll guide you every step of the way — from preparing your documentation to securing the best possible outcome with the IRS.