Pros And Cons Of The Irs Fresh Start Program In 2023

Business 3 Mins Read Mony Shah 18 Sep 2023
Irs Fresh Start Program

The topic of taxes is usually not everyone’s favorite subject, but it becomes particularly nerve-wracking when one finds themselves owing money to the Internal Revenue Service (IRS).

Life circumstances can change, and sometimes taxpayers find themselves in a tricky financial situation. For those who owe back taxes and are grappling with stress and confusion, the IRS Fresh Start Program could be a light at the end of the tunnel.

Launched in 2011, the Fresh Start Program was designed to help struggling taxpayers pay off their tax debts over an extended period. Over the years, the program has undergone numerous refinements. As we dive into 2023, it’s essential to weigh the pros and cons of the IRS Fresh Start Program carefully.

In the following post, we explore both the benefits and drawbacks of this program to help you make a well-informed decision.

Pros Of IRS Fresh Start Program

Pros Of IRS Fresh Start Program

1. Streamlined Installment Agreements

One of the main advantages of the Fresh Start Program is that it offers a streamlined process for installment agreements. This allows taxpayers to set up a payment plan without the need to provide a financial statement or undergo an in-depth financial review. The payment plans can extend up to 72 months, giving ample time for taxpayers to pay off their debt.

For those who are new to this process, it may be helpful to look for Tax Law Advocates. Experts can guide you through the nuances of installment agreements, ensuring that you make the most out of your participation in the program.

2. Penalty Abatement

The IRS Fresh Start Program also offers relief from failure-to-pay penalties for some taxpayers. This is particularly beneficial for individuals who are facing short-term financial struggles. By offering a reduction in penalties, the program gives taxpayers a lifeline and a better chance to get back on their feet.

3. No Public Record Of Tax Lien

Another significant advantage is that the IRS will generally not file a Notice of Federal Tax Lien for tax debts below $25,000 if you’re under an installment agreement. This is beneficial because having a tax lien can severely impact your credit score, making it difficult to secure loans or credit in the future.

4. Improved Mental Health

Being in debt to the IRS can be mentally exhausting. The Fresh Start Program offers the psychological benefit of knowing that there is a structured plan in place to get you out of debt. This can significantly reduce stress and anxiety, helping you focus on other aspects of life.

Cons Of The IRS Fresh Start Program

Cons Of The IRS Fresh Start Program

1. Accumulation of Interest

While the program allows for extended payment terms, interest continues to accrue on the outstanding amount. Over the long term, you may end up paying more than you initially owed.

2. Strict Adherence Required

The IRS requires strict adherence to the terms of the installment agreement. Failure to meet these terms, like missing a payment, could result in the cancellation of your agreement, leaving you back at square one.

3. Limited Scope

The Fresh Start Program only covers federal tax debts and does not apply to state tax liabilities, student loans, or other types of debt. If you have multiple debts, you’ll need to find other solutions for those.

4. Potential for Long-term Financial Strain

While stretching payments over an extended period can seem like a relief, it could potentially result in financial strain. You have to make sure that you can meet the payment obligations, or you risk defaulting on the agreement.


The IRS Fresh Start Program offers a viable path for many taxpayers who find themselves unable to pay their tax debts all at once. However, like any financial decision, it’s essential to weigh the pros and cons carefully. An installment agreement can offer immediate relief and mental peace but may also lead to long-term financial strain and increased total payments due to accumulating interest.

Before diving headfirst into this program, it’s a good idea to consult tax professionals. Tax Law Advocates or similar experts can provide invaluable insights into your specific situation, ensuring you make the most informed decision possible.

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With an adept skill of curating content on multiple genres, Mony has harnessed success as a Content Writer quickly. Find her sharing her profound thoughts and opinions on lifestyle, beauty, fashion, pets, and parenting.

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