IRS Fresh Start Initiative helps struggling taxpayers deal with taxes
  • February 19, 2016
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In 2011, the IRS acknowledged the challenging times people were facing in the depressed economic climate by rolling out the Fresh Start Initiative (FSI). The Economic downturn we faced in 2015 suggests a revitalization of the is program may be on the horizon. The initiative provides a ray of hope to financially distressed and struggling taxpayers, giving them a chance to keep up with their tax payments and avoid tax liens. The program helps qualified taxpayers by exempting them from penalties on unpaid dues and accrued interest. Since inception, the IRS Fresh Start Initiative has helped thousands of struggling taxpayers deal with taxes and penalties. Here are some of the noteworthy changes made to the IRS Fresh Start Initiative since its introduction.

Offer in Compromise (OIC)

Taxpayers struggling to pay the full federal tax bill can apply for an Offer in Compromise (OIC) to reduce their tax burden. An Offer in Compromise allows eligible taxpayers to settle their tax debts at less than the full amount they owe. Fresh Start, in time, has expanded and streamlined the OIC program. The IRS however, doesn’t accept the offer if it believes that the taxpayer can pay the due amount in full or through a payment agreement. The changes made to OIC in the IRS Fresh Start Initiative 2015 include the introduction of an OIC Pre-Qualifier tool to establish eligibility by taking the following taxpayer attributes into account:

  • Ability to pay
  • Income
  • Expense
  • Equity

Installment Agreement

Taxpayers who are not eligible for OIC can seek professional help to negotiate manageable monthly payments in an IRS installment agreement. Traditionally, taxpayers owing more than $25,000 in tax debts were subjected to an invasive income examination process to determine their monthly payments. The Fresh Start Initiative of 2015 has raised the limit to $50,000, meaning the taxpayers with debt up to $50,000 can now pay their tax debt through monthly direct debit payments for up to six years. A taxpayer with debt of more than $50,000 can also apply for the installment agreement but have to first provide the IRS with a financial statement. For more information visit

Tax Liens

A tax lien is government’s legal claim against the taxpayer’s property, when they have failed to pay their tax debt. Liens enable the government to claim all property including real estate, personal property, and various financial assets. Liens against property make it difficult for taxpayers to raise credit and the property often ends up in an auction. The situation often arises when taxpayers ignore or refuse to pay tax debts on time. If a taxpayer defaults on the Direct Debit Installation Agreement, the IRS has the authority to send a Notice of Federal Tax Lien asserting its legal right to their property. The revised tax lien provisions allow struggling taxpayers to get rid of federal tax lien in any of the following four ways:

  • Paying tax debt in full
  • Discharge of property
  • Subordination
  • Withdrawal

You can read more about these options at

The Bottom Line

The IRS Fresh Start Initiative is designed to help struggling taxpayers do away with their back taxes and penalties in a hassle-free manner. Since its introduction in 2011, the program has undergone multiple changes, making it easier for taxpayers to settle disputes quickly and avoid inconveniences. Taxpayers can seek professional help to learn their eligibility to the program and also negotiate a fair OIC agreement. Feel free to contact us at (972) 426-2553 for a free consultation with Nick.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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