IRS Fresh Start penalty relief timeline
  • June 24, 2024
  • admin
  • 0

Facing tax penalties can be daunting, but the IRS Fresh Start Penalty Relief program offers a lifeline for qualifying taxpayers. The IRS fresh start initiative aims to alleviate the burden of certain penalties, providing eligible individuals and businesses with a pathway to resolve their tax obligations. But how does the IRS Fresh Start program work? In today’s blog, we’ll walk you through everything you need to know about the IRS Fresh Start program and give you a glimpse of a realistic timeline to help you manage expectations and plan accordingly.

What is the Fresh Start Penalty Relief program?

The Fresh Start Tax program, officially known as the IRS Fresh Start Initiative, is a series of measures introduced by the IRS to assist individual taxpayers and small business owners in resolving their tax debts. Launched in 2011, the Fresh Start tax program aims to provide relief to taxpayers who are struggling to meet their tax obligations due to financial hardship. Under the Fresh Start tax Initiative, the IRS offers various options and streamlined processes to help taxpayers settle their tax debts more easily. These options may include:

  • Installment Payment Plans: Taxpayers can arrange to pay their tax debts over time through installment payment plans. The IRS offers streamlined installment plans with flexible repayment terms to accommodate taxpayers’ financial situations.
  • Offer in Compromise (OIC): Qualifying taxpayers may be eligible to settle their tax debts for less than the full amount owed through an Offer in Compromise. This option allows taxpayers to make a lump-sum payment or structured payments over time to satisfy their tax liabilities.
  • Penalty Relief: The Fresh Start Initiative provides relief from certain penalties, such as the failure-to-pay and failure-to-file penalties, for eligible taxpayers who are unable to meet their tax obligations on time.
  • Currently Not Collectible (CNC) Status: Taxpayers experiencing financial hardship may qualify for Currently Not Collectible status, temporarily suspending IRS collection activities until their financial situation improves. 

Eligibility Criteria For Penalty Relief

Qualifying for relief under the Fresh Start Initiative hinges on a few key factors. Firstly, you should ensure all federal tax filings are up-to-date, and the total combined sum of back taxes, interest, and penalties doesn’t exceed $50,000 for individual taxpayers. Small business owners can also benefit if their payroll tax debt doesn’t surpass $25,000. Being current on federal tax return filings and quarterly payments is crucial for business eligibility. Under the Fresh Start Initiative, the coverage extends to federal back taxes, along with associated interest and penalties. However, for state tax debts, consulting state taxing authorities becomes necessary to explore available resolution options. Remember, while the Fresh Start Initiative opens doors to relief, not every taxpayer automatically qualifies. It’s essential to assess your situation against the specific eligibility guidelines corresponding to the relief option you intend to pursue. Whether it’s entering into a payment plan, seeking an OIC, or exploring IRS penalty abatement, understanding your eligibility is the first step toward finding the right solution for your tax debt woes. 

Types Of Penalties Covered Under The Program

Under the umbrella of the IRS Fresh Start Program, various penalties can be addressed, providing much-needed relief to qualifying taxpayers. Here’s a breakdown of the penalties covered:

Failure-to-Pay Penalty

When taxpayers fail to remit their taxes by the due date, they may incur a failure-to-pay penalty. This penalty typically accrues at a rate of 0.5% of the unpaid taxes per month, up to a maximum of 25% of the outstanding balance. However, under the Fresh Start Program, eligible taxpayers may be able to reduce or eliminate this penalty, alleviating some financial strain associated with unpaid taxes.

Failure-to-File Penalty

Taxpayers who fail to submit their tax returns by the deadline may face a failure-to-file penalty. This penalty accrues at a rate of 5% of the unpaid taxes for each month or part of a month that the return is late, up to a maximum of 25% of the unpaid taxes. Through the Fresh Start tax relief program, qualifying individuals and businesses may have the opportunity to mitigate this IRS penalty interest, making it more manageable to fulfill their tax obligations.

Other Penalties Assessed by the IRS

In addition to the failure-to-pay and failure-to-file penalties, the IRS may assess other penalties for various tax-related infractions. These penalties can range from accuracy-related penalties to penalties for underpayment of estimated taxes. Eligibility for penalty relief under the Fresh Start Program may extend to these penalties as well, depending on the specific circumstances of each case. 

Benefits Of Participating In The Program

Participating in the IRS Fresh Start Program offers a multitude of benefits for eligible taxpayers, providing much-needed relief from the burden of unpaid tax debts. Here are some key advantages:

Penalty Reduction or Elimination

One of the primary benefits of the Fresh Start Program is the opportunity to reduce or eliminate certain tax penalties. For individuals and businesses struggling with back taxes, this can lead to significant savings by avoiding hefty penalty fees that can accrue over time. By addressing penalties through the Fresh Start Program, taxpayers can regain control of their finances and alleviate some financial strain associated with tax debts.

Flexible Repayment Options

The Fresh Start Program offers flexible repayment options tailored to the unique financial situations of taxpayers. Whether through streamlined installment plans, offers in compromise, or other relief alternatives, eligible individuals and businesses can choose a repayment option that aligns with their ability to pay. This flexibility makes it easier for taxpayers to manage their tax liabilities and work towards resolution without experiencing undue financial hardship.

Protection From Collection Actions

Participating in the Fresh Start Program can provide protection from aggressive collection actions by the IRS. By proactively addressing tax debts through the program, taxpayers may avoid more severe consequences such as wage garnishment, bank levies, or property seizures. This protection offers peace of mind and allows taxpayers to focus on resolving their tax obligations without the added stress of collection enforcement actions.

Pathway to Financial Stability

Ultimately, the Fresh Start Program serves as a pathway to financial stability for individuals and businesses struggling with tax debts. By addressing unpaid taxes and penalties, taxpayers can regain control of their finances and take steps towards long-term financial health. Through the program’s relief options, eligible taxpayers can achieve resolution, alleviate financial stress, and move forward with confidence towards a brighter financial future.

Opportunity for Fresh Start

As the name suggests, participating in the Fresh Start Program offers taxpayers the opportunity for a clean slate and a fresh start. By resolving tax debts and penalties through the program, individuals and businesses can put past financial challenges behind them and focus on building a more secure financial foundation for the future. This fresh start empowers taxpayers to take control of their financial destinies and move forward with renewed optimism. 

Realistic Timeline: What To Expect

The Fresh Start Penalty Relief program involves several stages, each with its own timeline. Understanding the process can help taxpayers manage expectations and plan accordingly. Here’s a realistic breakdown of the timeline: 

Initial Assessment and Preparation (Timeline: Weeks 1-2)

The journey begins with an initial assessment of your tax situation. Take time to gather all necessary documentation, including tax returns, financial statements, and any correspondence from the IRS. Evaluate your eligibility for penalty relief under the Fresh Start Program and ensure you have a clear understanding of your financial circumstances. 

Submission of Penalty Relief Request (Timeline: Weeks 3-4)

Once prepared, submit your penalty relief request to the IRS. This typically involves completing the appropriate forms and providing supporting documentation to substantiate your claim for relief. Prompt and accurate submission is crucial to avoid delays in processing. Be sure to double-check all information before submission to minimize the risk of errors or omissions. 

IRS Review and Decision (Timeline: Weeks 5-12)

After receiving your penalty relief request, the IRS will review the submitted documentation and assess your eligibility for relief. This stage may take several weeks as the IRS evaluates the information provided and makes a decision regarding the requested relief. Be patient during this period and stay prepared to provide additional information or clarification if requested by the IRS. 

Communication and Follow-Up (Timeline: Weeks 13-16)

Throughout the process, maintain open communication with the IRS. Respond promptly to any inquiries or requests for additional information. Keep track of all correspondence and document any interactions with the IRS. Regularly follow up on the status of your penalty relief request to ensure it is progressing as expected. 

Outcome and Next Steps (Timeline: Weeks 17+)

Finally, you will receive a decision from the IRS regarding your penalty relief request. If approved, the IRS will adjust your account accordingly, reducing or eliminating the applicable penalties. Review the outcome carefully and take any necessary steps to fulfill your remaining tax obligations. If your request is denied, explore alternative options for resolving your tax liabilities and consider seeking professional assistance if needed. 

Final Word

The IRS Fresh Start Penalty Relief program offers a valuable opportunity for eligible taxpayers to mitigate the impact of certain tax penalties and resolve their tax liabilities. If you’re facing financial hardship due to tax penalties, consider exploring the options available through the Fresh Start program and take proactive steps to address your tax obligations. To know your options, consult with a tax professional, such as Dallas tax attorneys at The Law Offices of Nick Nemeth. An experienced tax attorney in Dallas, Texas can help you decide what’s best for you. For more information about the IRS Fresh Start Program or to explore other tax relief options, feel free to contact our team of Dallas tax lawyers. Call (972) 426-2553 or fill out the contact form, and our representatives will reach out to you shortly. 

Please follow and like us:

What Our Clients Have to Say

Brent VahleBrent Vahle
19:13 02 May 24
I called to see if they could help reduce some penalties and fees. The person I spoke with told me it might be counterproductive for them to take my case since their feels would likely equal the amount of penalty/interest abatement. I decided to pass on moving forward but was so happy to hear a legal team, or any business for that matter, who has that much integrity. I feel most others would likely try to take my money anyway. I hope I never have to go through this again, but if I do, I will definitely use the Law Offices of Nick Nemeth!
Jason WinkleJason Winkle
18:44 02 May 24
Jaime Flores was very friendly, professional, and knowledgeable. She gave me some very valuable information which helped guide me with a plan of action. The free consultation is very much appreciated.
Matthew SwigartMatthew Swigart
12:14 02 May 24
Great attorney who was able to provide quick and useful advice. Although my situation did not warrant their services, they still took the time to discuss solutions I could explore. I highly recommend visiting this office!
Tony PantojaTony Pantoja
12:57 09 Apr 24
Very professional and very knowledgeable, Jamie Flores was very straight forward and professional, a firm that doesn’t just take your money, Thanks
Carla AtwalCarla Atwal
10:52 02 Apr 24
Nick was wonderful in guiding me with direction on some tax questions I had. He was concise, and to the point, and was happy to provide general info to me at no charge. I truly appreciate him and would highly recommend him.
Miguel AlvaradoMiguel Alvarado
15:56 25 Mar 24
By far the best attorneys I have ever worked with. They’re are very helpful and supportive from day one. They went above and beyond to make sure all my documents were submitted on time and gave updates as soon as they received them. I cannot name a single flaw in their work. Their team of assistants are very professional and seem to all be on the same page. I’ve made multiple phone calls and sent a ton of emails to their staff and they were able to help me all through the course of the case. I cannot express my gratitude enough for how excellent they handled my case.
Lucy FoyLucy Foy
06:55 19 Jan 24
My first appointment I had with, Tax Attorney Nick Nemeth, gave me such a sense of relief. He listened and gave me his professional advice, Mr Nemeth took my case. I was well kept updated, by phone calls and letters. That really impressed me and gave me so much confidence in them. The case went on for a couple of months. The day I received the call from one of his team members Kyle, informing me that the case was resolved and that I owed absolutely nothing to the IRS, I was overwhelmed with joy. I would recommend this law firm to anyone that needs help, with any tax issue. Thank you, to the Law Firm of Attorney Nick Nemeth and his team.
Bradley RunyonBradley Runyon
20:17 13 Jan 24
I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.
Sue HulsemanSue Hulseman
19:55 11 Jan 24
Working with Nick Nemeth and his team to resolve my debt with the IRS was the best decision I could have made. I felt such relief knowing I didn’t have to deal with the IRS myself. They did a wonderful job and were responsive to my questions and kept me abreast of my case. My outcome was exactly what I was hoping for. I strongly recommend using them if you have an issue to resolve with the IRS.
R GR G
20:53 21 Dec 23
I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.
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.
M WM W
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!
js_loader
Quick Inquiry

    captcha

    Enter the text you see above