Tax attorney in Los Angeles - Victory Tax Lawyers
(800) 883-8301 Free Consultation

IRS Fresh Start Program and Its Connection to OIC

Offer In Compromise

Before delving into the dynamics of the IRS Fresh Start Program and its intricate relationship with the Offer in Compromise (OIC) program, it is essential to grasp the fundamental concepts and how they interconnect. These two IRS initiatives play pivotal roles in helping individuals and businesses manage their tax debt challenges, but understanding their functions and how they relate to each other is the first step towards making informed decisions about resolving your tax obligations

Outstanding Tax Debt:

  • Fresh Start Program: To be eligible for the Fresh Start Program, you must have an outstanding tax debt with the IRS. This program is specifically designed for individuals and businesses who are struggling to pay their tax liabilities.
  • Offer in Compromise (OIC): OIC also targets individuals and businesses with outstanding tax debt, but it offers a unique opportunity to settle that debt for less than the full amount owed. This can be a particularly attractive option for those who are experiencing severe financial hardship.

Tax Compliance:

  • Fresh Start Program: To be eligible for the Fresh Start Program, you must have an outstanding tax debt with the IRS. This program is specifically designed for individuals and businesses who are struggling to pay their tax liabilities.
  • Offer in Compromise (OIC): OIC also targets individuals and businesses with outstanding tax debt, but it offers a unique opportunity to settle that debt for less than the full amount owed. This can be a particularly attractive option for those who are experiencing severe financial hardship.

Ability to Pay:

  • Fresh Start Program: The Fresh Start Program is primarily aimed at individuals and businesses who can’t afford to pay their tax debt in full but can make regular monthly payments. It provides a streamlined process for setting up an installment agreement.
  • Offer in Compromise (OIC): OIC is typically considered when individuals or businesses are facing financial hardship and cannot pay their tax debt in full, even through an installment plan. It allows for negotiation to settle the debt for an amount that is less than the total owed.

Debt Amount:

  • Fresh Start Program: The Fresh Start Program is generally more suitable for individuals or businesses with relatively lower tax debts, typically less than $50,000. This program provides flexibility in setting up a payment plan to address the debt.
  • Offer in Compromise (OIC): OIC is often pursued by individuals with larger tax debts that they cannot realistically pay in full. It is an option for those who are facing substantial tax liabilities and significant financial difficulties.

It’s essential to understand that while these programs share some common eligibility criteria, they serve different purposes and have distinct features. The Fresh Start Program focuses on helping individuals and businesses set up manageable payment plans, while the Offer in Compromise offers a potential way to settle tax debt for less than the full amount owed.

When considering these options, it’s highly recommended to consult with a tax professional or attorney who can assess your specific financial situation, help you navigate the application process, and guide you toward the most appropriate solution for your tax debt challenges.

Frequently Asked Questions

Can I apply for both the Fresh Start Program and Offer in Compromise at the same time?
Yes, you can apply for both, but it’s generally advisable to explore one option at a time. Consult with a tax professional to determine the best approach for your specific situation.
Are there any fees associated with the Fresh Start Program or Offer in Compromise?
Both programs have application fees, but there are fee waivers available based on your income and financial hardship. The fees can be substantial, so it’s essential to consider these costs when applying.
How long does it take to get approved for the Fresh Start Program or Offer in Compromise?
Approval times can vary widely depending on your specific circumstances and the IRS’s workload. It’s essential to be patient and provide all required documentation promptly.
Can I negotiate the terms of my Fresh Start Program or Offer in Compromise agreement with the IRS?
Yes, in some cases, you can negotiate the terms to better suit your financial situation. However, it’s often best to seek assistance from a tax professional to navigate these negotiations effectively.

Request A Free Consultation

Request a free consultation with our experts today and take the first step towards achieving your goals.

Tax attorney near me free consultation