Why there is no Fresh Start application
The Fresh Start Initiative was a set of IRS policy changes announced in 2011 and 2012. It loosened the rules for installment agreements, lien notices and offers in compromise. It never created a program you enroll in, and it has no deadline. The history of the initiative shows what changed then and what the rules are now.
So "applying for Fresh Start" means choosing the option your numbers support and using that option's own application. The five steps below are the order that avoids wasted applications.
The five steps
- 1.Find the real balance. Pull your account transcripts for every year with a balance, either in your IRS online account or by mail. The transcript shows the tax, penalties, interest and payments the IRS has actually recorded, which often differs from the notice in your hand. See which transcript answers which question.
- 2.File what is missing. Every option requires that all required returns are filed. A payment plan request is denied if a required return is outstanding, and an offer in compromise is returned. If the IRS filed a substitute return for you, filing your own usually changes the balance. Start with unfiled returns.
- 3.Pick the option the numbers support. Compare what you owe with what you can pay each month and how long the IRS has left to collect. The options comparison sets them side by side.
- 4.Apply through the right channel. Each option has its own form or online route, listed in the table below. Use the online route where one exists: it is cheaper and faster.
- 5.Stay compliant. File every later return by its due date and pay every later balance in full, or the arrangement defaults. Fix your withholding or estimated payments in the same week you apply.
Many people can do all five steps themselves. If you owe $50,000 or less and your returns are filed, the IRS online application takes one sitting and the only cost is the IRS setup fee.
Which application goes with which option
Low-income taxpayers, meaning adjusted gross income at or below 250% of the federal poverty level, pay no setup fee on a direct debit plan and $43 on other plans, which may be reimbursed.
| Option | How you apply | Form | IRS cost |
|---|---|---|---|
| Short-term payment plan (180 days or less, under $100,000) | IRS online account for individuals, or by phone | None online | $0 setup fee |
| Simple Payment Plan ($50,000 or less for individuals) | IRS online account, phone, mail or in person | None online; Form 9465 by mail | $29 online with direct debit, $69 online without; $107 or $178 by phone, mail or in person |
| Payment plan above $50,000, or a payment you cannot afford | Phone or mail, with a financial statement | Form 9465 with Form 433-F, or Form 433-H | Same setup fees as above |
| Offer in compromise | IRS Individual Online Account, or by mail | Form 656 with Form 433-A (OIC) or 433-B (OIC) | $205 application fee plus the initial payment, both waived under the Low-Income Certification |
| Lien notice withdrawal | Mail to the Collection Advisory Group | Form 12277 | No fee |
| Penalty relief | Automatic for many 2025 returns; otherwise phone or a written request | Form 843 when in writing | No fee |
| Hardship delay (currently not collectible) | Phone, usually with a financial statement | Form 433-F, 433-A or 433-B | No fee |
Applying for a payment plan
Individuals who owe $50,000 or less in combined tax, penalties and interest and have filed all required returns can request a Simple Payment Plan (formerly the streamlined installment agreement) online. The IRS tells you immediately whether it is approved. No financial statement is required, and the balance has to be paid by the collection statute expiration date, which the IRS describes as up to 10 years for most taxpayers.
Sole proprietors and independent contractors apply as individuals. Operating businesses cannot apply online and call the number on the notice or 800-829-4933. Our step-by-step guide to the online application walks through each screen, and the Form 9465 guide covers the paper route.
Applying for an offer, lien withdrawal or penalty relief
- Offer in compromise: check eligibility first with the IRS Pre-Qualifier tool or in your online account. Individuals can now file the offer online; businesses mail Form 656 and Form 433-B (OIC). The IRS says to explore all other payment options before submitting an offer. See the offer rules.
- Lien notice withdrawal: after three consecutive direct debit payments on a qualifying agreement with a balance of $25,000 or less, send Form 12277. See lien withdrawal.
- Penalty relief: for tax year 2025 returns and later, the Automatic Exemption from Penalty is applied without a request if you qualify. For earlier years, call the number on the notice or write. See the Form 843 guide.
- Hardship delay: call the number on your notice and be ready to complete a financial statement. Penalties and interest keep running while collection is paused.
Mistakes that cost time
- Applying for a plan while a return is still unfiled. The request is denied.
- Proposing a monthly payment you cannot keep. A defaulted plan restarts collection and costs a fee to reinstate.
- Filing an offer when your assets and income show you can pay in full. The fee and payments are applied to your balance, not refunded.
- Setting up a plan for old years while under-withholding on this year. The new balance defaults the plan.
- Paying a company to submit an application you could file online yourself for the IRS fee alone.
Where we come in
We do the record work that comes before the application: reading account and wage transcripts for every open year, preparing unfiled returns, working out the collection statute date for each assessment, preparing the Collection Information Statement with its documents, and writing down which options your numbers support. We give you a scope and a price in writing before anything starts. If a Simple Payment Plan online is all you need, we will say so.
Figures on this page were checked against the IRS and Massachusetts sources listed alongside on October 1, 2026. They change — confirm the current amount before relying on one.
General information for owner-led businesses, not advice for your specific situation. Tax and accounting rules change, and how they apply depends on facts particular to your business. Talk to us — or to another qualified professional — before acting on anything here.
