Is the IRS Fresh Start Program Real? A Tax Attorney Explains
If you listen to the radio or watch cable news, you have undoubtedly heard the commercials. A very serious voice tells you about a “new” IRS program that can resolve your back taxes for “pennies on the dollar.” They usually call it the “Fresh Start Initiative” or something similar.
If you are struggling with tax debt, these ads sound like a lifeline. Unfortunately, they are often misleading.
In this week’s edition of “5 on Fridays,” Managing Attorney Mark Milton debunks the myths surrounding these marketing claims and explains the reality of settling debt with the IRS.
Is the “IRS Fresh Start Program” advertised on TV real?
No, the program as advertised in those commercials does not exist. As Mark puts it, “It’s marketing fake news.”
These tax relief companies use catchy names to repackage existing, complex IRS programs to make them sound like an easy, guaranteed fix for everyone. They are designed to get you to call a toll-free number, not to provide nuanced legal advice.
What is the actual program for settling IRS debt?
The real program that these ads are loosely referring to is called an Offer in Compromise (OIC).
An Offer in Compromise allows certain taxpayers to settle their tax debt for less than the full amount owed. However, it is not a “get out of jail free” card. The IRS accepts an OIC only if they determine that you cannot pay your full tax liability, or if doing so would create a severe financial hardship.
Is it easy to qualify for an Offer in Compromise?
No. Qualifying for an OIC is difficult and involves a rigorous review of your finances. The IRS will look closely at your:
- Ability to pay.
- Income.
- Expenses.
- Asset equity.
If the IRS believes you have the income or assets to eventually pay your debt in full (even over several years), they will reject your offer. The “pennies on the dollar” settlements are rare and reserved for those in dire financial situations.
The Danger of Tax Relief Scams
The danger of these “Fresh Start” ads is that they promise results before even looking at your financial situation. Many “tax relief mills” charge high upfront fees to file OIC applications that they know have little chance of being accepted.
If you have serious back tax issues, do not rely on marketing gimmicks. You need a qualified tax attorney to review your specific financial situation to see if an Offer in Compromise is a realistic option for you.
Get Real Help for Tax Debt
Ignoring the IRS won’t make them go away, but falling for scams will only make your situation worse. If you need real answers about resolving your tax liabilities, contact Milton Law Group today.