IRS Fresh Start Program: What It Was and the Options the IRS Lists
“Fresh Start” was the IRS’s name for a series of changes to lien filing, installment agreements, offers in compromise and penalty relief that it announced in news releases in 2011 and 2012. When we checked on November 2, 2026, none of the IRS pages, publications, manual sections and news releases we read for this site described applying for “Fresh Start” as a program; the IRS lists the options for a tax debt separately, each under its own name. When we checked irs.gov on November 2, 2026, its “Get help with tax debt” page listed payment plans, an offer in compromise, delay of collection and penalty relief as options, each with its own rules, next to a Make a payment link.
Maintained by Archie Chang · IRS texts checked on November 2, 2026 · Methodology & sources
The options irs.gov lists, side by side
Each option has its own IRS page and its own conditions. The table sets the IRS’s one-line description of each option next to the fee the IRS lists for it.
| Option | What the IRS page says | Fee the IRS lists |
|---|---|---|
| Payment plans | Pay over time with a short or long-term payment plan. | Setup fee by plan type (table below) |
| Offer in compromise (OIC) | Settle your tax debt for less than you owe, if you qualify. | Every OIC application requires a $205 application fee and a first payment unless you meet the low-income qualifications. |
| Delay collection | If you can't pay now, you may qualify for a temporary delay. | Not listed |
| Penalty relief | Request relief from penalties if you qualify. | Not listed |
“Not listed” means that the IRS page named in the note under that option’s heading below lists no fee. Each option is explained further down.
How irs.gov uses the name Fresh Start
Among the documents we saved, the name appears on the IRS lien page, for two lien withdrawal options, and in three news releases from 2011 and 2012. The IRS tax lien page quotes the rest of that lien page section.
“Two additional Withdrawal options resulted from the Commissioner’s 2011 Fresh Start initiative.”
Among the other IRS pages, publications, manual sections and news releases we saved on November 2, 2026 for this site (listed under Sources), only the IRS page “Understanding a federal tax lien” uses the name “Fresh Start”.
None of the three IRS news releases quoted on this page (IR-2011-20, IR-2012-31 and IR-2012-53) describes applying to Fresh Start itself; each describes separate changes to lien filing, installment agreements, offers in compromise or penalties.
IR-2012-31 and IR-2012-53 call Fresh Start an initiative, and IR-2012-31 also refers once to the Fresh Start program announced the year before. The IRS describes the tax debt options under their own names, so this page treats each one separately.
Before choosing an option: filing returns
The IRS page says that most payment plans and relief options require all tax returns to be filed, and that the first step toward resolving a tax debt is to file missing returns.
IRS wording
“If you owe a tax debt that you can't pay in full, we can help. You have options to resolve it.”
“Pay what you can, then consider other options here.”
- Most payment plans and relief options require that all tax returns are filed.
- Here's what to know:
- You don't need to pay the full amount right away to file
- The first step toward resolving a tax debt is to file missing returns
- You'll qualify for more options once you file
Payment plans
The IRS describes a payment plan as an agreement to pay the taxes owed within an extended timeframe, with a setup fee that depends on the type of plan and how it is requested.
| Plan | Apply online | Apply by phone, mail or in person | Low-income taxpayer | Printed under the fees |
|---|---|---|---|---|
| Short-term payment plan | $0 setup fee (individuals only) | $0 setup fee (up to 180 days) | Not listed | Plus accrued penalties and interest until the balance is paid in full |
| Long-term payment plan with Direct Debit | $29 setup fee | $107 setup fee | setup fee waived | Plus accrued penalties and interest until the balance is paid in full |
| Long-term payment plan without Direct Debit | $69 setup fee | $178 setup fee | $43 setup fee which may be reimbursed if certain conditions are met | Plus accrued penalties and interest until the balance is paid in full |
“Not listed” in the low-income column is this site’s label for the claim below. These are the same fees the IRS payment plan calculator uses. The IRS page also prints fees for revising a plan or reinstating one after default; the calculator page covers those.
On the IRS payment plans page, the lines under the short-term payment plan (“Pay amount owed in 180 days or less”) do not mention low income.
IRS wording
“Pay over time with a short or long-term payment plan.”
“A payment plan is an agreement with the IRS to pay the taxes you owe within an extended timeframe.”
“If you qualify for a short-term payment plan you will not be liable for a user fee.”
If you are an individual, you may qualify to apply online if:
- Long-term payment plan (installment agreement): You owe $50,000 or less in combined tax, penalties and interest, and filed all required returns.
- Short-term payment plan: You owe less than $100,000 in combined tax, penalties and interest.
“Not paying your taxes when they are due may cause the filing of a Notice of Federal Tax Lien and/or an IRS levy action.”
Offer in compromise
The IRS says an offer in compromise may allow a tax debt to be settled for less than the full amount owed, and that generally it won’t accept an offer if the debt can be paid in full through a payment plan and/or equity in assets. The application fee is $205 plus a first payment, unless the low-income qualifications are met.
IRS wording
“Settle your tax debt for less than you owe, if you qualify.”
“An offer in compromise (OIC) may allow you to settle your tax debt for less than the full amount you owe if you can’t pay in full or doing so would cause financial hardship. We consider your income, expenses, and asset equity.”
“Generally, we won’t accept an offer if you can pay your tax debt in full through a payment plan and/or equity in assets. Before applying, explore other payment options to determine which option is right for you.”
“Every OIC application requires a $205 application fee and a first payment unless you meet the low-income qualifications.”
The fee, payment options, low-income table and pending-offer rules are on the offer in compromise page.
Delay of collection (Currently Not Collectible)
The IRS says it may temporarily delay collection when a tax debt cannot be paid because of financial hardship. The full debt is still owed, and penalties and interest continue to accrue.
The IRS page “Temporarily delay the collection process” (page last reviewed 13-Jul-2026) does not list a fee for Currently Not Collectible status.
IRS wording
“If you can't pay now, you may qualify for a temporary delay.”
“If you cannot pay your tax debt due to financial hardship, we may temporarily delay collection until your financial condition improves.”
If you cannot pay due to financial hardship, we may place your account in Currently Not Collectible (CNC) status, which means:
- We have temporarily suspended most collection activities.
- You still owe the full amount of your tax debt. It is not forgiven or cancelled.
- Penalties and interest continue to accrue until you pay your balance in full.
“We may file a Notice of Federal Tax Lien to protect the government’s interest in your property.”
Penalty relief
The IRS lists penalty relief as its own option. First Time Abate is tied to a history of timely compliance, and the IRS page says it is transitioning to Automatic Exemption from Penalty (AEP).
The IRS page “Administrative penalty relief” (page last reviewed 22-Oct-2026) does not list a fee for requesting First Time Abate relief or for AEP relief.
IRS wording
“Request relief from penalties if you qualify.”
“You may qualify for penalty relief if you tried to comply with tax laws but were unable due to circumstances beyond your control.”
“The most common administrative penalty waiver provided by the IRS, First Time Abate (FTA), applies to taxpayers with three years of timely compliance history. However, FTA is transitioning to a new relief called Automatic Exemption from Penalty (AEP), starting Summer 2026.”
The criteria, the penalties covered and how the IRS says to ask are on the penalty abatement page.
What the 2011 and 2012 news releases said
IR-2011-20 listed five lien and collection changes, IR-2012-31 raised the installment agreement threshold and tied penalty relief to tax year 2011, and IR-2012-53 changed parts of the offer in compromise calculation. They are historical documents, so the figures in them are the figures of those dates.
IR-2011-20, February 24, 2011
IR-2011-20 wording
“WASHINGTON — In its latest effort to help struggling taxpayers, the Internal Revenue Service today announced a series of new steps to help people get a fresh start with their tax liabilities.”
The changes include:
- Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
- Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
- Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
- Creating easier access to Installment Agreements for more struggling small businesses.
- Expanding a streamlined Offer in Compromise program to cover more taxpayers.
IR-2012-31, March 7, 2012
IR-2012-31 wording
“WASHINGTON — The Internal Revenue Service today announced a major expansion of its “Fresh Start” initiative to help struggling taxpayers by taking steps to provide new penalty relief to the unemployed and making Installment Agreements available to more people.”
“To assist those most in need, a six-month grace period on failure-to-pay penalties will be made available to certain wage earners and self-employed individuals. The request for an extension of time to pay will result in relief from the failure to pay penalty for tax year 2011 only if the tax, interest and any other penalties are fully paid by Oct. 15, 2012.”
The penalty relief will be available to two categories of taxpayers:
- Wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to the April 17 deadline for filing a federal tax return this year.
- Self-employed individuals who experienced a 25 percent or greater reduction in business income in 2011 due to the economy.
“This penalty relief is subject to income limits. A taxpayer’s income must not exceed $200,000 if he or she files as married filing jointly or not exceed $100,000 if he or she files as single or head of household. This penalty relief is also restricted to taxpayers whose calendar year 2011 balance due does not exceed $50,000.”
“Taxpayers meeting the eligibility criteria will need to complete a new Form 1127A to seek the 2011 penalty relief.”
“The IRS announced today that, effective immediately, the threshold for using an installment agreement without having to supply the IRS with a financial statement has been raised from $25,000 to $50,000.”
“In order to qualify for the new expanded streamlined installment agreement, a taxpayer must agree to monthly direct debit payments.”
“The maximum term for streamlined installment agreements has also been raised to 72 months from the current 60-month maximum.”
By its own wording, the penalty relief in IR-2012-31 was tied to tax year 2011, and the installment agreement figures are those of March 7, 2012. For the plan eligibility and fees the IRS page printed when we checked, see the payment plans section above.
IR-2012-53, May 21, 2012
IR-2012-53 wording
“WASHINGTON — The Internal Revenue Service today announced another expansion of its "Fresh Start" initiative by offering more flexible terms to its Offer in Compromise (OIC) program that will enable some of the most financially distressed taxpayers clear up their tax problems and in many cases more quickly than in the past.”
In certain circumstances, the changes announced today include:
- Revising the calculation for the taxpayer’s future income.
- Allowing taxpayers to repay their student loans.
- Allowing taxpayers to pay state and local delinquent taxes.
- Expanding the Allowable Living Expense allowance category and amount.
What the IRS says about companies that offer to settle tax debt
The IRS warns that promoters offer to arrange an offer in compromise for a fee, and says a taxpayer can check eligibility for free with its Pre-Qualifier tool.
IRS wording
“Promoters on radio and TV claim they can settle your tax debt for cheap with an offer in compromise. In reality, you pay the promoter for what you can do yourself with the IRS.”
“You can settle a tax debt directly with us if you’re eligible for an offer in compromise (OIC).”
“A taxpayer can check their eligibility for free using the IRS's Offer in Compromise Pre-Qualifier tool.”
The IRS Offer in Compromise Pre-Qualifier tool is at https://irs.treasury.gov/oic_pre_qualifier/.
Frequently asked questions
Is there an IRS Fresh Start program I can apply for?
Not as a single program. When we checked on November 2, 2026, none of the IRS pages, publications, manual sections and news releases we read for this site described applying for “Fresh Start” as a program; the IRS lists the options for a tax debt separately, each under its own name. Three IRS news releases from 2011 and 2012 (IR-2011-20, IR-2012-31 and IR-2012-53) describe changes to lien filing, installment agreements, offers in compromise and penalty relief, and the 2012 releases call them the “Fresh Start” initiative. The IRS page “Understanding a federal tax lien” refers to the Commissioner’s 2011 Fresh Start initiative. On irs.gov the options for a tax debt are listed separately: payment plans, an offer in compromise, delay of collection (Currently Not Collectible status) and penalty relief. Each has its own request or application route, described on the IRS pages linked on this site.
What did the IRS Fresh Start change in 2011 and 2012?
IR-2011-20 (February 24, 2011) listed five changes: a higher dollar threshold when liens are generally issued, easier lien withdrawals after payment, lien withdrawals in most Direct Debit Installment Agreement cases, easier installment agreements for small businesses and a wider streamlined offer in compromise. IR-2012-31 (March 7, 2012) announced a six-month grace period on failure-to-pay penalties for “certain wage earners and self-employed individuals”: “The request for an extension of time to pay will result in relief from the failure to pay penalty for tax year 2011 only if the tax, interest and any other penalties are fully paid by Oct. 15, 2012.” It named two categories: wage earners “unemployed at least 30 consecutive days during 2011 or in 2012 up to the April 17 deadline for filing a federal tax return this year”, and self-employed individuals who “experienced a 25 percent or greater reduction in business income in 2011 due to the economy”. The relief was “subject to income limits” ($200,000 if married filing jointly, $100,000 if single or head of household) and was “restricted to taxpayers whose calendar year 2011 balance due does not exceed $50,000”; taxpayers had to complete “a new Form 1127A”. The same release raised “the threshold for using an installment agreement without having to supply the IRS with a financial statement” from $25,000 to $50,000, and the maximum term for streamlined installment agreements to 72 months from 60; to qualify for the expanded streamlined agreement, “a taxpayer must agree to monthly direct debit payments.” Those are the 2012 figures; they are separate from the $50,000 limit that the IRS payment plans page listed, when we checked on November 2, 2026, for applying online for a long-term payment plan. IR-2012-53 (May 21, 2012) announced, in certain circumstances, a revised calculation of the taxpayer’s future income, allowing taxpayers to repay their student loans and to pay state and local delinquent taxes, and expanding the Allowable Living Expense allowance category and amount, for offers in compromise.
What are the IRS Fresh Start program qualifications?
Eligibility is stated option by option: the payment plans page, the offer in compromise page and Form 656 Booklet, the Currently Not Collectible page and the penalty relief pages each print their own conditions. This site’s pages for offers, penalty abatement and liens go further.
How much do an IRS payment plan and an offer in compromise cost?
The IRS payment plans page (updated March 3, 2026) lists a $0 setup fee for a short-term plan (online for individuals only; $0 by phone, mail or in person for up to 180 days) and, for a long-term plan with Direct Debit, $29 to apply online or $107 by phone, mail or in person. A long-term plan without Direct Debit is $69 online or $178 by phone, mail or in person. The page prints “Plus accrued penalties and interest until the balance is paid in full” under the fees of each plan. The offer in compromise application fee is $205 plus a first payment, unless the low-income qualifications are met (IRS Offer in compromise page, reviewed 19-Oct-2026; Form 656 Booklet, Rev. 4-2026).
Does the IRS settle a tax debt for less than the amount owed?
The IRS offer in compromise page says an offer may allow a taxpayer to settle a tax debt for less than the full amount owed if the taxpayer can’t pay in full or doing so would cause financial hardship, and that generally the IRS won’t accept an offer if the debt can be paid in full through a payment plan and/or equity in assets. See the offer in compromise page for the fee, payments and eligibility text.
What does the IRS say about companies that offer to settle tax debt?
The IRS page “Tax scams” says promoters on radio and TV claim they can settle a tax debt for cheap with an offer in compromise and that “you pay the promoter for what you can do yourself with the IRS.” The IRS also says taxpayers can check their eligibility for free with its Offer in Compromise Pre-Qualifier tool (IR-2023-63, March 30, 2023).
Related pages
Sources
Every quotation, fee, amount and date above comes from these irs.gov documents, which we saved on November 2, 2026. The date or revision each document printed is shown with it.
- Get help with tax debt (page last reviewed or updated 17-Aug-2026)
- Payment plans; installment agreements (page last reviewed or updated 13-Aug-2026; costs section updated March 3, 2026)
- Offer in compromise (page last reviewed or updated 19-Oct-2026)
- Form 656 Booklet, Offer in Compromise (Form 656-B (Rev. 4-2026))
- Temporarily delay the collection process (page last reviewed or updated 13-Jul-2026)
- Penalty relief (page last reviewed or updated 09-Sep-2026)
- Administrative penalty relief (page last reviewed or updated 22-Oct-2026)
- Penalty relief for reasonable cause (page last reviewed or updated 21-Jun-2026)
- Internal Revenue Manual 20.1.1, Introduction and Penalty Relief (IRM 20.1.1 effective 11-25-2025; 20.1.1.3.3.2.1 dated 03-29-2023; page last reviewed or updated 30-Apr-2026)
- Understanding a federal tax lien (page last reviewed or updated 14-Sep-2026)
- Publication 594, The IRS Collection Process (Publication 594 (Rev. 1-2026))
- Publication 1450, Instructions for Requesting a Certificate of Release of Federal Tax Lien (Publication 1450 (Rev. 7-2018))
- Internal Revenue Manual 5.12.2, Notice of Lien Determinations (IRM 5.12.2 effective 07-12-2024; 5.12.2.6 dated 10-14-2013; page last reviewed or updated 30-Apr-2026)
- Tax scams (page last reviewed or updated 17-Oct-2026)
- IR-2023-63, Offer in Compromise mills (news release dated March 30, 2023)
- IR-2011-20, lien and collection changes (news release dated February 24, 2011)
- IR-2012-31, penalty relief and installment agreements (news release dated March 7, 2012)
- IR-2012-53, offer-in-compromise terms (news release dated May 21, 2012)
Reviewed November 2, 2026. Sums on this page are arithmetic on the IRS’s numbers and are labelled as such.