Fresh Start IRS Installment Agreements

It is always encouraged by the Internal Revenue Service that taxpayers file in a timely manner and pay as much of any tax debts owed as possible. Unfortunately, this is not always possible.  In 2010, the IRS began a Fresh Start IRS initiative which has made it easier for taxpayers to qualify for tax payment programs through a federal tax payment plan. The IRS Fresh Start Installment Agreement is an incentive for taxpayers who have back taxes owed but are unable to pay them in full.  Tax law allows for the IRS to enter into a monthly payment plan, known as an installment agreement, with the taxpayer.  The IRS changed the rules for tax installment agreements making it easier for taxpayers who owe $50,000 or less. In order to qualify for a Fresh Start IRS tax installment agreement, a taxpayer must meet the many requirements.  The taxpayer must have all of their tax returns filed and their current year tax debts are paid.  Once an agreement between the IRS and the taxpayer is established, the taxpayer must stay in compliance. For taxpayers seeking an installment agreement with a tax debt of more than $50,000, they will have to fill out a Collection Information Statement, either Form 433-A or Form 433-F.  Or taxpayers have the option to pay down their balance to $50,000 and be able to qualify for the streamlined Fresh Start IRS installment agreement. Generally, the IRS will have you file a 433-D form to finalize your agreement and set up direct debits. Small businesses can qualify for an In-Business Trust Fund Express Installment Agreement.  This agreement is for businesses that owe $25,000 or less, or can pay down the liability to $25,000 before entering into the agreement. The business must be compliant with all filing and payment requirements, and the debt must be paid in which ever is earlier: within 24 months or prior to the end of the Collection Statute Expiration date.  For this agreement, the business must enroll into the Direct Debit installment agreement if the amount is more than $10,000, but less than $25,000. For small business, there is also the option of a streamlined installment agreement under the Fresh State IRS initiative. The Fresh Start initiative has raised the maximum amount to $50,000 and the tax liability can be paid off monthly up to 72 months. An installment agreement is a smart option for taxpayers who cannot pay their tax bill in its entirety by the due date.  Though installment agreements reduce penalties, interest continues to accrue on the balance.  Usually, taxpayers must agree to monthly direct debit payments to qualify for this agreement. An installment plan is one of the most popular tax debt resolution options, but unfortunately, it has high default rates. If you default, the IRS will send CP523, but you can minimize this risk by talking with a tax attorney to ensure a payment plan is the best option for your finances. As always, it is the most beneficial to the taxpayer to pay any liabilities owed as soon as possible.  If that is not an option, you should consult with an experienced tax attorney to find the best option for you. Generally the IRS will accept an offer if they believe it is the most the agency will be able to collect and it meets the IRS Collection Financial Standards.  We can help you decide on the correct federal tax payment plan for you.


We Can Help You No Matter Where You Live.

We help clients with both IRS and state tax problems. Our offices are located in New York State, and we are very experienced in helping people set up NY installment agreements, offers in compromise, and other relief programs. However, our services don’t stop at the state border. We can help clients in any state.

Attorney Timothy Hart

Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ Attorney Bio ]