IRS Fresh Start Program
IRS Fresh Start Program Helps Taxpayers Who Owe the IRS
IRS Tax Tip 2013-57, April 17, 2013
The IRS Fresh Start program makes it easier for taxpayers to pay back taxes and avoid
tax liens. Even small business taxpayers may benefit from Fresh Start. Here are three
important features of the Fresh Start program:
• Tax Liens. The Fresh Start program increased the amount that taxpayers can owe
before the IRS generally will file a Notice of Federal Tax Lien. That amount is now
$10,000. However, in some cases, the IRS may still file a lien notice on amounts less
When a taxpayer meets certain requirements and pays off their tax debt, the IRS may
now withdraw a filed Notice of Federal Tax Lien. Taxpayers must request this in writing
using Form 12277, Application for Withdrawal.
Some taxpayers may qualify to have their lien notice withdrawn if they are paying their
tax debt through a Direct Debit installment agreement. Taxpayers also need to request
this in writing by using Form 12277.
If a taxpayer defaults on the Direct Debit Installment Agreement, the IRS may file a new
Notice of Federal Tax Lien and resume collection actions.
• Installment Agreements. The Fresh Start program expanded access to streamlined
installment agreements. Now, individual taxpayers who owe up to $50,000 can pay
through monthly direct debit payments for up to 72 months (six years). While the
IRS generally will not need a financial statement, they may need some financial
information from the taxpayer. The easiest way to apply for a payment plan is to use
the Online Payment Agreement tool at IRS.gov. If you don’t have Web access you
may file Form 9465, Installment Agreement, to apply.
Taxpayers in need of installment agreements for tax debts more than $50,000 or longer
than six years still need to provide the IRS with a financial statement. In these cases,
the IRS may ask for one of two forms: either Collection Information Statement, Form
433-A or Form 433-F.
• Offers in Compromise. An Offer in Compromise is an agreement that allows
taxpayers to settle their tax debt for less than the full amount. Fresh Start expanded
and streamlined the OIC program. The IRS now has more flexibility when analyzing a
taxpayer’s ability to pay. This makes the offer program available to a larger group of
Generally, the IRS will accept an offer if it represents the most the agency can expect to
collect within a reasonable period of time. The IRS will not accept an offer if it believes
that the taxpayer can pay the amount owed in full as a lump sum or through a payment
agreement. The IRS looks at several factors, including the taxpayer’s income and
assets, to make a decision regarding the taxpayer’s ability to pay. Use the Offer in
Compromise Pre-Qualifier tool on IRS.gov to see if you may be eligible for an OIC.
Additional IRS Resources:
Online Payment Agreement tool
Fresh Start Notice of Federal Tax Liens
Form 12277, Application for Withdrawal
Understanding a Federal Tax Lien
Offer in Compromise Pre-Qualifier tool
Offer in Compromise
Electronic Payment Options Home Page
Payments (payment options)